On May 1, 2016, Hulu announced a new service aimed at cord-cutters. The unnamed subscription service would stream feeds of popular broadcasts and pay-TV channels, making the company a competitor to traditional pay-TV providers. Walt Disney Co. and 21st Century Fox, co-owners of Hulu, are working on agreements to license many of their channels for the platform. Comcast Corporation, another co-owner of Hulu, has yet to announce if it will participate in the service with its NBC programming.
Pay-TV providers are developing streaming services to increase their number of consumers. Dish Networks, Comcast, and AT&T-DIRECTV all offer curated streaming programs. Because one-in-seven Americans are “cord-cutters,” meaning they no longer have a traditional pay-TV subscription, online offerings allow pay-TV providers to gain back some of their former subscribers.
Hulu’s new service is not an attempt to regain former subscribers. Instead, it hopes to grab cord-cutters from the entire video marketplace. Hulu’s service could become the standard for streaming live television because it would not require a specific Internet service provider, and because it could pull programming from three of the biggest content companies - Disney, Fox, and NBC.
This transition from pay-TV to streaming services within the video marketplace is a response to the increasing number of cord-cutters. There is no doubt that the video market is moving online, but the FCC recently proposed to lock in old technology and add unnecessary regulations to set-top boxes. These regulations would not only create costs that could stifle this innovative transition, but they would allow 3rd parties to reap the benefits of content creators’ intellectual property rights.