Hulu's skinny bundle lags behind competitors

BI Intelligence

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Hulu Live's subscriber count is relatively low compared to other online TV services, The Information reported. The company’s “skinny bundle”, or custom TV package with fewer channels than a traditional pay-TV subscription, launched in May of this year and has 300,000 subscribers.

That's far behind Sling TV, the leader in the space, which has amassed about 2 million subscribers since being launched in 2015. It trails PlayStation Vue, launched in 2015 and boasting 450,000 subscribers, and DirecTV Now, which debuted the following year and counts about 491,000 subscribers. Nonetheless, the company still beats YouTube TV’s — which was launched earlier this year — subscriber count of 200,000 subscribers. Advertisers may prioritize their online TV ad budgets to leaders Sling TV and Playstation Vue instead of Hulu Live. 

Online TV services can help companies appeal to an ever-increasing number of cord cutters. Nearly 5 million consumers have quit pay TV since 2014, according to S&P Global Market Intelligence, while pay-TV losses could accelerate to 5 million annually, according to RBC Markets analyst Steven Cahall, cited by Variety. Skinny bundles can lure consumers to sign up with their lower than pay TV price point, but this may become increasingly hard as OTT services (typically priced around $10), like Netflix, aggressively develop high profile content and attract cord cutters. 

Hulu Live is not yet profitable, which will likely cause the service to lean on advertising for growth. Hulu likely paid at minimum $28 per subscriber to license channels from Disney, Fox, CBS, and NBCUniversal, according to MoffetNathanson cited by The Information, and Time Warner channels cost at least another $3, according to S&P Global Market Intelligence. With additional expenses like overhead and marketing, Hulu Live’s $40 price point means the service is likely not generating significant profits. Hulu expects to become more profitable through growing advertising revenues, according to a company spokeswoman, but low subscriber numbers for Hulu Live could deter advertisers from investing in the platform. 

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