Even as it contemplates an investment in Hulu, Time Warner is also trying to get the streaming service to fundamentally change its approach. And there’s a risk that if Time Warner is successful, it could actually cripple Hulu, or at least substantially decrease its value for some users.
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Hulu appeals to cord-cutters—who are giving up their cable subscriptions in growing numbers —because they can watch current episodes of TV shows from a variety of networks without having to subscribe to an expensive cable package. But that’s exactly what Time Warner hates about it.
On the one hand, Time Warner would really like to own a stake in Hulu, in part because it would make an effective hedge against cord cutting and Netflix. But at the same time, the media conglomerate would also really like Hulu to stop showing current season episodes of its TV shows, because that eats into its pay-TV revenue.
In a sense, investing in Hulu would be a side bet by Time Warner on its own cannibalization by streaming services. But it’s clear that the corporation also wants to pursue its own pay-TV model, which is aimed at holding on to as many existing viewers as possible through “TV Anywhere” services and other more flexible approaches to cable. In other words, it wants to preserve “the bundle.”
My 2 cents:
In an attempt to hedge against disruption and the natural evolution towars personalization of the media streaming (aka TV) industry, Time Warner is looking at leveraging Hulu’s pull with users. Yet Hulu is not only a competitor of Time Warner’s main content and bundle, it is an iffy player in the chord cutter world. Compared to Netflix and Amazon Video, Hulu isn’t quite as robust. Compared to the successful migrations to streaming packages like HBO GO, Hulu’s original content isn’t quite as popular. It doesn’t seem like Time Warner is ready to/willing to/able to truly maximize the potential of investing in Hulu, and it seems like Hulu isn’t quite successful enough to hedge Time Warner’s bets sufficiently.