AT&T and Disney have both taken early blows in the 2019 streaming bout and the latest jab has been delivered by Hulu after figures were published claiming that the Hulu with live TV service has caught up DirecTV Now in terms of subscribers.
It was more of a gift to Hulu than a well-placed sucker punch but still, talk about kicking someone when they’re down. Research firm TDG reports that the live streaming version of Hulu is neck and neck with DirecTV Now on 1.6 million subscribers. But crucially, one of these services is growing in subscriber numbers while the other is going in the opposite direction – meaning Hulu with Live TV may well have overtaken DirecTV Now by, well, now.
It’s the dreaded sequel to AT&T’s set of fourth quarter results in which not only did 403,000 subscribers scrap their DirecTV satellite subscriptions, but 267,000 fled the DirecTV Now streaming service. A disastrous end to the year for AT&T which we described at the time as an ominous omen for the operator’s impending HBO-fronted Netflix rival due to launch later this year.
Of course, the main Hulu SVoD offering has approximately 25 million subscribers in total, making the Hulu with Live TV service just 6.4% of its total subscriber base but at a significantly higher price point of $39.99 a month (or $43.99 a month without ads), compared to the basic $7.99 a month Hulu offering ($11.99 a month without ads). Considering DirecTV Now starts at $35 a month, catching it so rapidly from its launch in Q1 2017, when DirecTV Now had a head start to the tune of 400,000 subs, is an impressive feat. Hulu will now have Sling TV in its sights, currently the leading US MVPD with just over 2.4 million subscribers.
Sling TV added 47,000 subscribers last quarter but uptake is slowing and the Dish Network-owned MVPD is on the verge of a plateau, as shown by the graph from TDG below. It also shows that the total MVPD market in the US is around 8 million. The Others figure from TDG includes the likes of YouTube TV, on about 800,000 subs, PlayStation Vue with half a million, and fuboTV with around 250,000. Figures from our research arm Rethink TV agree mostly with these numbers, although TDG’s methodology in calculating the Hulu live TV numbers is unclear.
So, with competition heating up and NBCUniversal talking up a good game for its 2020 OTT video launch, it will be interesting to see how the new look AT&T, with its hefty content assets through Time Warner, will balance the scales in terms of licensing content to streaming rivals and holding back titles for its own services.
Hulu may have won this week’s battle, but it’s worth remembering that just a few weeks ago Disney revealed Hulu’s huge $469 million operating loss for the year despite a 48% increase in subscribers, prompting similar concerns around the launch of the Disney+ streaming service later this year. It will be a particularly interesting year for Hulu given that Disney is poised to become a 60% owner and questions remain about the longevity of the Hulu brand.