The online video service Hulu is planning to become the first to offer live television broadcasts along with a large library of on-demand programming.
With 12 million subscribers so far, Hulu lags far behind Netflix (NFLX), which offers only a library of on-demand programming. But Hulu is owned by some of the same companies that own the major TV networks: Comcast, which owns NBC, Disney, which owns ABC, and 21st Century Fox, which owns Fox.
“Once we do this, more people will be talking about Hulu than there are today,” Hulu CEO Mike Hopkins told Bloomberg in an interview published on Monday. “A lot of people are talking about Hulu, but this puts us in a different category.”
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The aim of Hulu’s new service, like many other Internet video offerings, will be to appeal to the estimated 20 million households that have dropped or avoided paying for cable and satellite television. The group of cord cutters and cord nevers is growing quickly while the traditional pay TV audience is shrinking. Hulu has switched its strategy several times since it was founded a decade ago, including moving from being entirely subscription-based to a partially advertising-supported model.
Some other companies, such as Dish Network (DISH) and Sony, have lately created bundles of live TV channels available by subscription over the Internet, but without much on-demand content. AT&T (T) is expected to announce on Monday a 100-channel service called DirecTV Now for just $35 per month.
Hulu aims to combine its current library of on-demand shows and movies, including series like “Seinfeld” and “South Park,” with live channels from its parents and other networks. Hulu has already made agreements to carry broadcast and cable channels from owners Disney (DIS), Fox (FOX) and Time Warner (TWX), Bloomberg reported. Negotiations are ongoing with Hulu owner Comcast’s (CMCSA) NBC Universal and CBS (CBS), which does not own a stake in the company.
The question remains whether Internet video viewers want to pay for a cable-like service. None of the current players has taken off, in part due to limits imposed by cable channel owners. And like AT&T, which has some 25 million traditional pay TV subscribers, Hulu’s owners do not want the company’s new service to be so appealing that it convinces more customers to cut the cord. “We’re not targeting pay TV customers to switch,” Hopkins told Bloomberg.
With those kinds of internal conflicts, it may take an outsider to break through to the cord-cutter audience. Apple (AAPL), Amazon (AMZN), and Google (GOOGL) are all rumored to be working on their own bundled channel video services.
