Analyst Todd Juenger cites what he calls a “theory” that the future of Hulu could be forming the heart of a skinny bundle that would be available as an over-the-top streaming VOD service.
In a note on Friday, Juenger says this theory has Hulu getting programming from owners Disney, Fox and Comcast, adding in Time Warner, CBS and A+E Networks to create a relatively skinny bundle that would be available for $40 a month.
“The appeal of Skinny Hulu, we suppose, would be: if skinny bundles are gaining popularity, the major network owners should take their product directly to consumers, capture the opportunity (and the margin, and the asset value) themselves, and ensure their networks are part of the theoretically) most widely distributed skinny bundle offering. Leave the nonsense networks out," Juenger said.
Juenger notes there would be some repercussions from such a move. Current distributors wouldn’t be happy (including Comcast, which for now doesn’t have a vote), distribution revenue growth would likely slow, churn would be higher and ad revenue would feel an impact.
The move might also force the excluded programmers—notably AMC Networks, Viacom and Scripps Networks—to band together for a service of their own. Juenger guesses their “anti-Hulu” package could cost about $9, like Netflix and Hulu.
“If Hulu is seriously contemplating a Skinny Hulu launch, we don't think we'll have to wait long to find out,” he said, because Comcast would get a chance to stop such a move in 2018.
Juenger suggests that programmers and distributors might be better off if they could all agree to make the big package skinnier by dropping weak-sister networks.
“These companies could right size and redesign themselves for the current realities of the video entertainment ecosystem. But that will never happen, especially in entertainment, where everybody believes their networks are uniquely indispensable and they will find the next hit,” he concludes.