Cablevision, provider of cable and internet services, has announced that it will at some point in the near future offer to sell Hulu Plus directly to its subscribers. Wondering how that could possibly make sense? So are we—with one possible exception.
There are few details of the arrangement available yet; Cablevision’s not even saying the price. But at its most basic level, yes, this really is an invitation from a cable company for you to pay for an online service that plays shows that have already appeared on cable in the recent past, complete with commercials. The coaxial cable is eating its own tail.
'It doesn’t make any sense; if I’m a consumer why don’t I subscribe directly to Hulu?' Dan Rayburn
Let’s assume that Cablevision realizes that this deal doesn’t make much sense for existing cable subscribers, given that those customers can already access most Hulu Plus shows via video on demand or their Cablevision-provided DVRs. That’s a safe enough bet; it’s hard to imagine even the most cynical company would expect consumers to buy into such a glaring redundancy. It’s a replacement play, pure and simple.
An edge case might be found in one widely reported development that’s now official: Hulu has acquired the streaming video rights to all 180 episodes of Seinfeld. That $180 million deal certainly increases the overall appeal of Hulu Plus, which unlike HBO Now or Netflix doesn’t offer enough original content to make it an enticing complement to cable. But it doesn’t seem to provide much more incentive to purchase Hulu Plus through Cablevision, which already offers repeated daily viewings of the hit sitcom—the last episode of which aired nearly 17 years ago—on TBS. The kind of superfan who doesn’t mind paying $8 per month for on-demand Seinfeld and doesn’t already own the series in some form could be enticed, but even they would seem more likely to sign up for Hulu Plus directly instead of through their ISP. As far as it applies to Cablevision, it’s a deal about nothing.
A more likely target would be for customers of Cablevision’s recently announced “cord cutter packages,” which are structured to appeal to people interested in paying for high-speed internet only. Those bundles include a digital antenna to receive broadcast television networks and require an upper-tier broadband connection. You can also opt to add HBO Now for an additional $15, the same amount you’d pay ordering directly from HBO. That HBO Now pricing may give a hint that Cablevision won’t be offering Hulu Plus at a discount over ordering directly; besides, as Rayburn points out, suddenly giving certain users a lower price point wouldn’t sit well with the existing Hulu Plus customer base.
Hoping that someone might opt to tack Hulu Plus onto such a bundle might seem reasonable in theory but doesn’t seem very likely in practice, according to streaming media analyst Dan Rayburn. “It doesn’t make any sense; if I’m a consumer why don’t I subscribe directly to Hulu?” Rayburn asks. “Anyone who wants Hulu Plus has it. Or if they find out about it they’re not going to find out through Cablevision. How often do you call your cable company?”
To put it another way: If you’re savvy enough a cord cutter to be aware of and want Hulu Plus, you’re also savvy enough to sign up directly through Hulu or through some other mode of digital distribution like iTunes. In fact, it’s unlikely you haven’t already.
A more likely scenario Rayburn envisions would be using Hulu Plus delivery as part of a customer retention strategy. Cablevision could conceivably offer it as a free bonus to a customer threatening to leave, or as a free limited-time offer to potential new sign-ups. Cablevision wouldn’t offer further comment, but such a move wouldn’t be unprecedented; last fall, Verizon offered a year of free Netflix to enlistees in a stripped-down FIOS package. And with so many cable packages looking so similar, being able to point to any kind of unique offering could make a difference between gaining and losing a customer, even if that offering doesn’t make a whole lot of sense in practice.
We’ll hopefully hear more details about the arrangement soon that make it clear not just why this is a good deal for Cablevision and Hulu Plus, but for either service’s customers. So far it seems less like the next great step toward cord cutting nirvana than it does white noise.
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