Hulu is building an online cable TV competitor but it says it's not 'declaring war' on cable

Hulu ceo mike hopkinsBusiness InsiderHulu CEO Mike Hopkins.

Hulu is developing a cable-like online TV package, CEO Mike Hopkins confirmed to The New York Times.

The offering is part of a push to rethink TV, which will include a greater emphasis on personalisation (understanding what you want to watch before you do), Hopkins says.

The pricing hasn’t been finalised, but sources told both The New York Times and
The Wall Street Journal that it’s expected to be about $40 per month.

Hulu announced Wednesday that it had reached 12 million subscribers, compared to Netflix’s 45.7 million paying subscribers in the US. The company is also getting into original documentary films, starting with an acquisition of “The Beatles: Eight Days A Week,” a film about the first part of the Beatles’ career, from Director Ron Howard.

The rise of the online bundle

Why is Hulu launching a online TV service now? “Broadband speeds have advanced quite a bit over the last few years,” Hopkins told The New York Times. “There are a couple of other offerings that have been put out into the market in various forms that show that network groups are willing to licence their channels in this way now.”

Hulu’s main value so far has been offering “day after” episodes of hit TV shows like “Empire” and “Blindspot,” but this new product would allow people to tune into feeds of cable and broadcast TV channels. It would compete with so-called skinny-bundle cable packages from traditional cable distributors as well as with online packages like Sling TV and PlayStation Vue.

Hopkins says Hulu is close to deals with both Disney and Fox for the new service.

Hopkins says Hulu isn’t “declaring war” on cable, but rather, going after a segment of the population that has fallen out of love with pay TV. This is similar to the argument HBO made when it began to sell its HBO Now à la carte service for $15 a month: We aren’t going after the same customers. HBO CEO Richard Plepler has said he believes there are about 12 million to 15 million “persuadable homes” for HBO Now and that these don’t overlap with current HBO subscribers, according to Variety. HBO has said only 1% of HBO Now subscribers previously had HBO.

But that argument might be a hard sell to cable distributors, including Hulu co-owner Comcast. Many traditional cable distributors are offering their own skinny-bundle packages of core cable channels, aimed at luring cord-cutters back into their ecosystem.

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