Hulu dan­gles HBO in front of cord-cut­ters

Like pay-TV, stream­ing ser­vices look to bun­dle

USA TODAY Weekend Extra - - MONEY - Mike Snider

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.

HULU

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

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