Earlier this week, Hulu delivered some bad news to its live TV subscribers: The service is getting a $10 per month price hike on December 18, bringing the cost to $65 per month for Hulu’s big bundle of streaming TV channels.
It’s the third major price hike for a live TV service this year, and it brings Hulu in line with YouTube TV and FuboTV, which both started charging $65 per month over the summer.
Sad as it is, we shouldn’t be surprised. If there was any doubt left about how the pay TV industry would respond to cord cutting, this latest price hike makes the endgame clear: There will be no pivot toward flexible packages, lower prices, or the mythical a la carte cable TV service. The prevailing strategy is now a scorched earth one, with routine price increases imposed on a shrinking number of pay TV subscribers.
That doesn’t necessarily mean going back to cable is a better option, but it does mean cord-cutters will have to make bigger sacrifices to save money, either by giving up channels they’d like to have or by dropping expensive bundles altogether.
The pay TV path not taken
Just a few weeks ago, I thought perhaps the industry was heading down a different path. T-Mobile had announced a new streaming service called TVision, promising a major shake-up in the packaging of pay TV channels.
Instead of one big bundle, T-Mobile was offering two separate packages: A $10-per-month service called TVision Vibe included only general entertainment channels, while a separate package called TVision Live would offer news, sports, and local channels starting at $40 per month. Although it wasn’t a la carte TV, TVision seemed like a sign that TV networks were warming up to more flexible bundles after years of steady subscriber losses.
But it turns out the only one embracing the idea was T-Mobile.
Immediately after TVision launched, TV networks started complaining that the carrier had tricked them into offering better bundles. Sources at Discovery and ViacomCBS told Matthew Keys that they were never informed of T-Mobile’s $40-per-month Live package, which doesn’t include channels like HGTV and Nickelodeon. A source at NBCUniversal said the company was unaware of T-Mobile’s $10-per-month Vibe bundle, which carries no local NBC channels. In all cases, the networks said their channels should be included in both TVision packages, which of course would ruin the entire proposition.
Whether T-Mobile will acquiesce is unclear—the company believes it’s not violating any of its carriage agreements—but the whole fracas lays bare how TV networks have embraced a slash-and-burn approach to pay TV packaging. Even the slightest hint of flexibility is enough to send them into a rage.
The reason for this is simple: Media behemoths like ViacomCBS, Disney, NBCUniversal, and WarnerMedia have started to see pay TV as a lost cause. Of the roughly 25 million households that have abandoned pay TV bundles over the past five years, most are not coming back, having settled in the pastures of standalone services such Netflix and Amazon Prime. Instead of trying to revive the bundle, TV networks will use whatever profits they can squeeze out to smooth the transition toward their own standalone services, including Disney+, HBO Max, Peacock, and CBS All Access.
Hulu + Live TV price hikes: What now?
Because of this strategy, the reality is that you won’t find an easy way to make up for Hulu’s price hikes:
- AT&T TV Now’s “Plus” package is less expensive than Hulu at $55 per month, but it doesn’t have as many sports or entertainment channels.
- Sling TV can be a lot cheaper at $30 per month, but only if you don’t need local channels (or can add them with an antenna). It can also quickly become more expensive through its combination of base packages and add-ons.
- Philo is a great $20-per-month option for certain entertainment channels, but it’s a non-starter for local channels, news, and sports.
- Vidgo provides a patchwork of news, sports, and entertainment channels starting at $40 per month, but is still missing a lot of popular channels and doesn’t include DVR service.
- Locast.org provides local channels in more than two dozen U.S. markets for just $5 per month, but most of the U.S. still can’t get it.
- Spectrum customers can look into TV Choice, which offers local stations and 10 a la carte cable channels for $25 per month (plus a $9-per-month broadcast TV fee), but only a subset of Spectrum’s channels are available this way. Also, Spectrum doesn’t offer this to current cable TV customers.
- If you’ve already ditched cable or satellite TV service, you might have luck securing a comeback deal, but you’ll have to watch out for any hidden fees, equipment costs, or contracts that might drive up the price.
All of which brings us to the nuclear option of abandoning TV bundles altogether. Between Netflix, Amazon Prime, HBO Max, Disney+, CBS All Access, Apple TV+, ESPN+, and the on-demand version of Hulu, you’d have a practically endless amount of movies and TV shows to watch. And while I would advise against subscribing to all these services at the same time, doing so would still cost less than a $65 per month subscription to Hulu + Live TV, YouTube TV, or FuboTV.
Of course, those standalone services don’t have everything you’d get with cable. Most live sporting events have not yet migrated over to services like ESPN+ and Peacock, and while there are lots of ways to watch the news without a big bundle, cable channels like CNN, MSNBC, and Fox News aren’t among them. TV networks are wagering that enough people will miss those channels to keep pay TV subscriptions from dropping too quickly, buying them time for a graceful landing in a direct-to-consumer future.
They are, in other words, daring you to make a move. Are you sufficiently fed up with yet another price hike to finally declare enough is enough? Or will you simply accept it, as so many customers have throughout the history of cable TV? With each new price hike, it becomes clearer that they’re banking on the latter.
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