Skinny Bundles at Hulu, YouTube? Fat Chance (Opinion)

First it was Hulu, now it’s YouTube: Everyone wants in on the skinny-bundle business.

And it’s not going to happen. At least not in the way you might assume.

Just hours after Hulu CEO Mike Hopkins confirmed from the stage of his company’s Newfront presentation Wednesday that he wants to get into live TV next year, a Bloomberg report suggested YouTube is headed down a similar path.

With YouTube just a day away from its own Newfront event, it’s counterintuitive during a period in which tech companies are all talking up how they are innovating video entertainment that some are evidently pursuing the ancient practice of bundling together linear TV networks. Talk about going back to the future.

The rationale is understandable: companies like Dish and Sony are already in the market trying to undercut the traditional pay-TV business at a lower price point.

But here’s the problem: for all the hype about giving consumers an alternative to the expensive, full channel bundle, we know precious little about how skinny bundles like Dish’s Sling TV are actually performing. What we do know is that the cord-cutting that was supposed to skyrocket in the face of these skinny bundles isn’t happening, at least not yet. Comcast and Time Warner Cable just disclosed in their first-quarter results that they’re actually adding video subs.

Yes, cord-cutting may start to gather steam at at some point, and these companies should be applauded for getting out ahead of what many deem an inevitable trend. But Hulu and YouTube are far from the first tech titans to try and go down this road only to get discouraged. Just ask Intel, which talked a big game before giving up and selling assets to Verizon, and Apple, which has had so many stops and starts on this front that there’s no reason to expect they won’t try again at some point.

Google has pockets just as deep as those companies. But YouTube is such a different platform than linear TV that it’s hard to believe a company with such a global outlook built on an entirely different breed of content is going to stretch for this kind domestic extension. It’s still early days for subscription service YouTube Red, a more logical but still risky gambit; seems smarter to get a handle on that before going further out on a limb.

At least Hulu’s move feels like a more organic outgrowth of a business already steeped in TV. But to think that the venture, as Variety exclusively reported, is going to go so far as to attempt to add local broadcast TV channels seems quite ambitious. Why not try something easier, like launching rockets a la Elon Musk?

Forgive some skepticism here on Hulu as well, but not everything that seems an imminent development for this company necessarily pans out in the fullness of time. What happened to last year’s report that Time Warner was supposed to join 21st Century Fox, Disney and NBCUniversal as a Hulu stakeholder?

If the prospect of Hulu adding a fourth owner seems far-fetched, it’s got nothing on the venture morphing into a stalking horse for some of the leading content companies to compete with the pay-TV distributors who would see such a skinny bundle as an act of war.

It’s quite a contrast from the stance Hulu took at its newfronts presentations over the last two years. The pitch in 2014 was its intent to partner with pay-TV services to offer Hulu in the set-top box; one year later, just Cablevision signed on.

Who’s to say whether they’ll see similarly lukewarm results for its skinny bundle proposition, which is supposedly under consideration at a range of major content companies. It will be difficult enough for Hulu to get its owners on the same page for this, if history is any indication.

Hopkins could be taken at his word that there’s at least an intent to explore live TV. But the lack of specificity with which he addressed the product he’s hoping to end up with leaves a lot of wiggle room between what we understand to be a “skinny bundle” and what may finally come to pass. What Sony and Dish are out in the market with won’t be the only way this cat will get skinned.

Just think back to the excitement that erupted last year when it was first reported that Amazon was “creating a online pay-TV service.” What Amazon came to market with wasn’t quite the skinny bundle everyone expected. Innovative? Yes. Gamechanging. Not really.

Watch this play out similarly at Hulu and YouTube. If it even plays out at all, of course.

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