Can Hulu package a live-streamed bundle of essential channels for under $40?
That is the essential question the Wall Street Journal pondered, as the new Hulu service gets ready to ramp up next year. Certainly, speculation regarding Hulu's price point for the new service will have a role during the upcoming rounds of second-quarter pay-TV earnings reports.
"Simplistically, if they price it at $40 a month, you want to be short cable," said MoffettNathanson analyst Craig Moffett to WSJ. "At $50, you want to be long, or at least it isn't a factor."
In surverys to existing customers for its SVOD service, Hulu has indicated plans to bundle the full compliment of channels from its three owners, Disney, Fox and Comcast/NBCUniversal, was well as channels from other major conglomerates, such as CBS Corp. Hulu listed its monthly price point for its base service at around $35 a month.
Getting to that price point will be challenging, Moffett said.
Factoring in programming costs for smaller MVPDs, and assuming Hulu licenses the Big Four broadcast networks plus major cable networks, its total wholesale programming costs alone will come out to around $35 a month. This isn't counting promotion, technology, etc.
An executive for Comcast (NASDAQ: CMCSA) told FierceCable recently that he thinks the price point for Hulu's new service will be closer to $50 once all is said and done.
- read this Wall Street Journal story
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Hulu's live TV service reportedly will start at $35/month, more than both Sling TV and PlayStation Vue
Hulu live stream will wholesale for around $34 a month, include affiliates, analyst says