For cord-cutters, Hulu with HBO at a discount is latest bundle offer

Hulu’s new 10-episode miniseries, ‘The Looming Tower,’ charts key figures in the CIA and FBI as they attempted to track Osama bin Laden and al-Qaida before the Sept. 11 terror attacks. (March 2)
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For many cord-cutters, the impetus to drop traditional pay TV is the oversized bundle of channels. Now, streaming services are looking to grow their audiences with, you guessed it, bundles.

The latest tempting offer dangled before cord-cutters and other streaming video lovers: Add HBO to your Hulu subscription for $4.99 monthly, a $10 savings off the regular price for six months. The deal is available to new and non-current HBO subscribers for a limited time.

Bundling channels and services isn’t a new concept — wireless carriers such as T-Mobile give some wireless subscribers free Netflix while AT&T gives them HBO. In November, Sprint began tossing in Hulu’s $7.99 monthly limited commercial plan.

And most streaming video services reward subscribers who pay for more channels, but you can expect cross-marketing to accelerate as the Internet-delivered video marketplace grows more crowded.

Cable and satellite pay-TV services, with their hundreds of channels, may have become unwieldy for some consumers, but that won’t stop video providers from bundling deals, says Joel Espelien, an analyst with Plano, Texas-based research firm The Diffusion Group.

“Customer acquisition is really challenging when you go to the direct-to-consumer world, so (as a standalone service) I’m not necessarily going to acquire 100% of my customers on my own,” he said. “So you are going to see all these other relationships.”

More: Hulu and Spotify offer a cost-saving dual subscription for $12.99 per month

Vengeance isn’t only human nature. Watch Season 1 of Westworld before the Season 2 premiere on April 22. pic.twitter.com/sA1KctKNIt
— hulu (@hulu) April 12, 2018

Hulu has been the most aggressive lately. This week, the streaming service announced a $12.99 monthly bundle of Spotify Premium with Hulu’s $7.99 tier (limited ads), savings of $4.99 per month if you pay for them separately.

A joint venture of ABC (Disney), NBC (Comcast), Fox — each own 30% stakes — and Time Warner (10%), Hulu last year began offering more than 50 live channels ($39.99 monthly) in addition to its subscription on-demand programming from major networks and its own originals (there’s a $11.99 monthly plan with no ads). Hulu also lets users add Showtime ($8.99 monthly) or Cinemax ($9.99).

All the other Net TV services — Sling, PlayStation Vue, DirecTV Now, YouTube TV and fuboTV — have programming bundles of varying price and let you add channels, sometimes at a discount.

Amazon has built out a successful strategy allowing Prime Video subscribers to add channels such as HBO, Starz, CBS All Access, Acorn TV and PBS Masterpiece, Espelien says. Subscribers get a break on some channels such as Showtime, which is priced at $8.99 monthly, $2 below Showtime’s own direct-to-consumer price ($10.99). You can watch on Amazon’s Fire TV devices and other devices via the Prime Video app.

HBO has seen subscriber growth despite the decline in pay-TV homes. In 2017, HBO and Cinemax added 5 million U.S. subscribers. With the second season of sci-fi series Westworld debuting April 22, this new promotion could be a strategy to drive ratings. “We could see deals like this becoming a regular occurrence as Hulu capitalizes on season premieres and other buzz-heavy events,” Jon Fingas wrote on tech news site Engadget.

Another likely reason for more bundles in your streaming future? Competitors looking to gain ground against industry leader Netflix.

While Netflix has been bundled with pay-TV service from Comcast for more than a year, “they are pretty jealous of that customer relationship and don’t really want to share” with other streaming services, Espelien says.

So, it makes sense for Hulu to team with HBO “for strength in numbers,” he said.

Beyond that, consumers may begin to get “subscription fatigue” from managing so many subscriptions, Espelien said. “It’s from too many business relationships, too many bills and too many annoying things where I forgot to cancel this and I don’t watch that any more.”