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.
Evan Rachel Wood of “Westworld” in a Hulu promotion offering HBO for $4.99 monthly for six months.