A New Hulu OTT Service: Broadcast, Cable Reach Key Viewers

Wide reach among TV viewers remains a major factor for growing OTT services -- especially a possible new one from Hulu, which is owned by three major TV companies.

MoffettNathanson Research believes that Hulu has an advantage in building a successful national OTT service -- with access to a possible 40% plus the reach the four broadcast networks have as a core base. 

But MoffettNathanson says the challenge is that broadcast networks do not control all its stations nationally. That creates a complicated scenario when it comes to networks’ OTT deals with their broadcast affiliates.

Comcast Corp., owner of NBCUniversal, Walt Disney Co. and 21st Century Fox, co-owned Hulu, the premium digital video platform. 



Twenty-First Century Fox has the largest reach when it comes to their owned-and-operated TV station coverage -- 37%. CBS, 32%; NBC, 27%; and ABC, 23%.

Looking at overall unduplicated reach -- broadcast and cable -- NBCUniversal has the highest, at 64.1%, followed by Walt Disney at 60.7%; 21st Century Fox with 55.4%; Viacom at 45.4%; Time Warner with 43.2%; CBS at 42.3% and Discovery with 35.5%.

Total share of viewers when it comes to big TV-media groups yields the similar results. MoffettNathanson Research says that in the 2014-2015 season Walt Disney was tops with a 18% share, followed by NBCUniversal, 17% share; Viacom, 14%; Time Warner, 13%; Fox, 12%; and CBS, 9%. 

Next comes Discovery Communications at 9% followed by Scripps Networks Interactive at 5% and AMC Networks with 3%.

MoffettNathanson Research believes a Hulu OTT package could have a consumer price of around $40 a month, with a gross margin for Hulu owners of $6 a month.

MoffettNathanson Research says pure-play cable network companies -- Time Warner, A+E Networks, and Scripps Networks Interactive -- have been most active in adopting “skinny” OTT pay TV packages. Media companies that have broadcast networks along with cable networks can be more complicated -- because of their broadcast affiliate relationships.

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