Hulu dangles HBO in front of cord-cutters
Like pay-TV, streaming services look to bundle
For many cord-cutters, the impetus to drop traditional pay-TV is the oversized bundle of channels. Now, streaming services are looking to grow their audiences with, you guessed it, bundles.
The latest offer being dangled before cord-cutters and other streaming video lovers: Add HBO to your Hulu subscription for $4.99 monthly, a $10 savings off the regular price for six months. The deal is available to new and non-current HBO subscribers for a limited time.
Bundling channels and services isn’t a new concept — wireless carriers such as T-Mobile give some wireless subscribers free Netflix while AT&T gives them HBO. In November, Sprint began tossing in Hulu’s $7.99 monthly limited commercial plan.
And most streaming video services reward subscribers who pay for more channels, but you can expect crossmarketing to accelerate as the Internet-delivered video marketplace grows more crowded.
Cable and satellite pay-TV services, with their hundreds of channels, may have become unwieldy for some, but that won’t stop video providers from bundling deals, says Joel Espelien, analyst with Plano, Texas-based research firm The Diffusion Group.
“Customer acquisition is really challenging when you go to the direct-toconsumer world, so (as a standalone service) I’m not necessarily going to acquire 100% of my customers on my own,” he said. “So you are going to see all these other relationships.”
Hulu has been the most aggressive lately. This week, the streaming service announced a $12.99 monthly bundle of Spotify Premium with Hulu’s $7.99 tier (limited ads), savings of $4.99 per month if you pay for them separately.
A joint venture of ABC (Disney), NBC (Comcast), Fox — each own 30% stakes — and Time Warner (10%), Hulu last year began offering more than 50 live channels ($39.99 monthly) in addition to its subscription on-demand programming from major networks and its own originals (there’s a $11.99 monthly plan with no ads). Hulu lets users add Showtime ($8.99 monthly) or Cinemax ($9.99). Other Net TV services — Sling, PlayStation Vue, DirecTV Now, YouTube TV and fuboTV — have bundles of varying price and let you add channels, sometimes at a discount.
Amazon has built out a successful strategy allowing Prime Video subscribers to add channels such as HBO, Starz, CBS All Access, Acorn TV and PBS Masterpiece, Espelien says. Subscribers get a break on some channels such as Showtime, priced at $8.99 monthly, $2 below Showtime’s own direct-to-consumer price ($10.99). You can watch on Amazon’s Fire TV devices and other devices via the Prime Video app.
HBO has seen subscriber growth despite the decline in pay-TV homes. In 2017, HBO and Cinemax added 5 million U.S. subscribers. With the second season of sci-fi series Westworld debuting April 22, this new promotion could be a strategy to drive ratings.
“We could see deals like this becoming a regular occurrence,” Jon Fingas wrote on tech news site Engadget.
Another likely reason for more bundles in your streaming future? Competitors looking to gain ground against industry leader Netflix.