Streaming networks are proving to be a huge success. With Netflix, Amazon, and Hulu, all creating their own original content, cable networks and broadcast TV seems to be on the losing end of the competition. But what sets Hulu apart from Netflix and Amazon is the fact that they can air your favorite TV shows the very next day, and with a paid subscription, you can watch full seasons of those shows anytime you want. Of course, with an option like that at your disposal, why even bother why paying a cable subscription at all? HBO figured that out with their on-demand service HBO Go.
But now it looks like the option to watch your favorite shows the very next day could be eliminated as Time Warner Cable is currently considering purchasing 25% of Hulu. The reason is because Time Warner believes that Hulu airing full, current seasons anywhere outside of the pay TV is harmful to their business. More on the story below.
From the Wall Street Journal (via /Film):
Time Warner believes that the presence of full, current seasons on Hulu—or anywhere else outside the bounds of pay-TV—is harmful to its owners because it contributes to people dropping their pay-TV subscriptions, or “cutting the cord.” In the discussions about taking a 25% equity stake in Hulu, Time Warner has told the site’s owners that it ultimately wants episodes from current seasons off the service, at least in their existing form, although that is not a condition for its investment, according to the people familiar with the discussions.
There is a little bit of truth to the first part of that statement about people who are opting to pay for Hulu, Amazon, and Netflix. Not only do they have access to full seasons, but they are also producing their own content, some of which are just edgier than what you would see on broadcast TV.
But that last part of the statement is what’s really important. Time Warner is only considering purchasing a fourth of Hulu, and if they do end up making the purchase, it’s unlikely they will ask them to cease their next day airing operations. If that is the case, then it’s very likely that they would ask Hulu for something else in exchange, what they would be asking for though is not clear.
As aforementioned, HBO has already launched their own streaming option with the HBO GO app. It should be noted that Time Warner is the parent company of HBO. Still, the thought of Time Warner even exploring the idea of streaming sites like Hulu goes to show how much of these streaming sites present a threat to cable companies.
Let’s face it. Time Warner just cannot keep up with the changing times, and unless they are willing to change their own business model, more and more people will continue to cancel their cable subscriptions in exchange for streaming sites.
[Source: Wall Street Journal via /Film]