Hulu scores double whammy in streaming wars

Hulu has had a busy week, first securing the Epix library after Netflix let it go, then announcing it was launching a virtually ad-free tier on its subscription service.

Netflix disclosed last Sunday that it would let its deal with Epix lapse at the end of September as part of its drive towards exclusive content. A few days later, Hulu said it had signed a contract for the same content, which includes movies like Hunger Games: Catching Fire, World War Z and Transformers: Age Of Extinction.

Hulu then announced a “No Commercials” plan, which enables its subscribers to watch the service with ads only playing on a handful of shows. The plan is priced at $12 a month, which is more than Netflix’s $9 a month, but only $4 more than Hulu’s standard membership.

The two pieces of news gave Hulu a much-needed boost against its more aggressive, ad-free competitors, Netflix and Amazon. In recent years, the studio-owned service has often been over-shadowed by its larger rivals and currently has around 9 million subscribers compared to 42 million for Netflix and an estimated 40-50 million for Amazon Prime Video.

Much of this could be down to a corporate legacy that hasn’t allowed the service to wildly over-spend on content or expand rapidly across the globe. Hulu is owned by three Hollywood studios – Disney, Fox and Universal – which must have had mixed feelings about its potential to cannibalise existing revenue streams.

To keep up with Netflix and Amazon, Hulu needs to invest in technology, ramp up original content and expand internationally – and it probably doesn’t have the resources to do all three.

But it has recently been putting up more of a fight. In addition to bagging the Epix catalogue, Hulu has signed several high-profile content deals over the past year – for TV shows including South Park, Seinfeld and Empire. Its also been launching original productions such as Difficult People and the revived version of The Mindy Project.

The Epix deal will significantly boost the movie offering on Hulu, which has previously focused on TV content. Epix, a New York-based cable channel with an SVOD service co-owned by Paramount, MGM and Lionsgate, will add titles such as Interstellar and Mission: Impossible – Rouge Nation to the Hulu line-up in coming months.

Hulu has also partnered with Showtime to bundle Hulu Plus with a subscription to the network’s new stand-alone streaming service for $17 per month. Then there is Hulu’s free tier that streams recently aired TV episodes, something Netflix doesn’t offer, which gives the service a large user base to market to.

One of the big questions for Hulu is how important is exclusivity in the streaming wars? Epix also has streaming deals with Amazon Prime Video, AT&T’s U-Verse and Dish TV’s Sling TV, which means its content is widely available elsewhere, an issue that proved unpalatable for Netflix.

But then maybe we shouldn’t be regarding the competition between the streaming giants as a fight to the death. Perhaps in the future, North American cord-cutters will sign up for multiple services – in which case Hulu could become a complement to Netflix, rather than a competitor.