& cplSiteName &

As Hulu Live Tops 1M Subs, Who Leads the OTT-TV Race?

Jeff Baumgartner

Reaching a milestone in the relatively nascent virtual MVPD sector, Hulu’s live TV service has eclipsed 1 million subscribers, roughly 15 months after the offering was launched, a person with direct knowledge of those numbers confirmed.

The subscriber mark, first reported this week by USA Today, is another clear indicator that Hulu LLC is having some success upgrading a portion of the millions of people who subscribe to its core subscription VoD service to the newer multichannel TV offering.

The Diffusion Group (TDG) currently estimates that total US virtual MVPD subscribers will flirt with the 8 million mark by the end of Q3 2018, with Sling TV holding a slight edge over AT&T’s DirecTV Now service. The group marked as "Other" in the chart below includes OTT-TV services that don't publicly disclose subscriber numbers on a regular basis (i.e., YouTube TV, PlayStation Vue, fuboTV and Philo ).

The rate of subscriber adds come as a bit of a surprise to some industry watchers.

"I'm seeing growth that I really didn't expect out of that collection of vMVPDs," said Michael Greeson, TDG's president and co-founder, who expects Hulu to have about 1.1 million subs by the end of Q3. "We could very well end up at 8.5 million [subs at the end of Q3] and come out higher than even the most optimistic forecasts."

As for this recent spike in subs, Greeson notes that services such as Sling TV and PlayStation Vue are ramping up their advertising again amid the start of the NFL regular season. fuboTV, the sports-focused OTT-TV service, has also introduced a new national campaign. (See fuboTV Kicks Off 'Don't Compromise' National Campaign .)

"It's just that time of year for them," he said.

For its part, Hulu introduced a new brand campaign ad this week in concert with the 2018 Emmy Awards under the "Better Ruins Everything" tagline. Watch Hulu's comedic take on reverse psychology below:

Greeson said it's not out of the realm of possibility that the current mix of virtual MVPDs could end 2018 with between 9 million to 9.5 million subs.

"We're at the beginning of that [subscriber] ramp right now," he said. "We're still squarely in the early adopter phase of this market."

But how long will that phase last? Greeson believes that OTT-TV players should start to worry about how to alter their messages for the consumer mainstream and get a fix on what the hang-ups are for that market before the early adopter market stalls out.

At the same time, he believes that the current batch of players will need to achieve much grander scale, with respect to subscribers, as the market is inching closer to an inevitable shakeout.

"I'm seeing growth percentage-wise, but they are working from a very low base," he said, noting that some of the pure play OTT-TV services without the luxury of having a deep-pocketed parent are the likeliest to be exposed to a market correction that could cause them to either shut the doors or seek out a buyer. "That shakeout will occur in the next couple of years," Greeson predicted.

Home in on the opportunities and challenges facing European cable operators. Join Light Reading for the Cable Next-Gen Europe event in London on November 6. All cable operators and other communications service providers get in free!

In the meantime, Greeson is anxious to see how AT&T Inc. (NYSE: T) fares with WatchTV, a sports-free, skinny bundle with more than 30 live channels and a VoD library that's free to mobile customers on AT&T's new unlimited plans and $15 per month on a standalone basis.

"I think that [model] will prove more and more attractive over time," he said. "There could be breakouts because of the sheer volume of people that subscribe to those mobile plans and receive the WatchTV service for free."

He's also keeping tabs on how some mobile giants, including T-Mobile US Inc. , are looking to tie their new 5G networks to service bundles featuring home broadband and pay-TV. (See T-Mobile to Play the Customer Care Card With Layer3 TV and T-Mobile Forming 'Wireless First' TV Strategy.)

"5G offers speeds that are plenty sufficient to support a live, multichannel pay-TV service over a wireless service to the home," Greeson said.

And while it's an interesting exercise to see how the OTT-TV players are stacking up at this stage of the game, eventually the dichotomy between those streaming services and the legacy pay-TV market will be erased as traditional service providers pivot more heavily to all-IP platforms and into an app-based, multiscreen world.

"Eventually this will all just be 'pay-TV'," Greeson said.

— Jeff Baumgartner, Senior Editor, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
More Blogs from The Bauminator
Concerns about new direct-to-consumer competition alongside pressure on Netflix's pricing power is misunderstood or overblown, contends LightShed Partners analyst Richard Greenfield.
The 10G future is in sight, HFC has gas in the tank, Comcast is getting serious about network virtualization, DOCSIS's pioneers get recognized and more from last week's show in The Big Easy.
New name and logo will adorn devices that conform to an emerging next-gen broadcast TV signaling standard designed to support 4K interactivity and aimed for widespread deployment in 2020.
Under fire from US broadcasters, Locast is appealing for funds to help it mount a legal defense, a move that was attempted eight years ago by Ivi Inc., an OTT-TV company that was sued out of existence.
Xfinity Flex, now offered for free to broadband-only subs, provides streaming apps and smart home capabilities – but it's also something else.
Featured Video
Upcoming Live Events
October 22, 2019, Los Angeles, CA
November 5, 2019, London, England
November 7, 2019, London, UK
November 14, 2019, Maritim Hotel, Berlin
December 3-5, 2019, Vienna, Austria
December 3, 2019, New York, New York
March 16-18, 2020, Embassy Suites, Denver, Colorado
May 18-20, 2020, Irving Convention Center, Dallas, TX
All Upcoming Live Events
Partner Perspectives - content from our sponsors
Sports Venues: Where 5G Brings a Truly Immersive Experience
By Peter Linder, 5G Evangelist, North America, Ericsson
Multiband Microwave Provides High Capacity & High Reliability for 5G Transport
By Don Frey, Principal Analyst, Transport & Routing, Ovum
All Partner Perspectives