The bundle of Disney direct-to-consumer properties will be available for purchase on Nov. 12, the day that the ambitious Disney Plus service is set to bow in the U.S.

Disney chief Bob Iger revealed the plan for the bundle during Disney’s quarterly earnings call with Wall Street analysts. Disney’s fiscal second quarter numbers came in below expectations, a shortfall Disney chalked up to lower than expected performances by key divisions of 21st Century Fox, which Disney formally acquired in March.

“Nothing is more important to us than getting this right,” Iger said of Disney’s aggressive move into direct-to-consumer streaming.

Iger also disclosed that Disney is in talks with Apple, Amazon and Google to distribute Disney Plus and presumably the newly disclosed bundle on their platforms. “We think it’s important to achieve scale relatively quickly and they’ll be an important part of that.”

Iger said consumer marketing for Disney Plus will start to emerge later this month. On the tech side, the Disney Plus team is devoting considerable energy to making it easy for prospective subscribers to sign up. “We know how important it is to create a friction-less experience,” he said.

Disney’s investment in its budding streaming services is only growing. Disney chief financial officer Christine McCarthy told analysts that the company’s Direct-to-Consumer and International divisions are projecting an operating loss of $900 million in the fiscal fourth quarter, up from $553 million loss in Q3 and up from a loss of about $370 million in fiscal Q4 2018.

The Hulu venture is now entirely on Disney’s books, which contributed to Disney’s widening loss in Direct to Consumer and International. Iger said Hulu’s subscriber base stands at 28 million. The Hulu Live digital MVPD service grew faster than any of its digital rivals in the quarter, McCarthy said.

In discussing the Q3 results, Iger emphasized the complexity of the 21st Century Fox integration and the need to invest as Disney makes significant shifts in its business priorities as it bets on streaming as the future of content distribution. Despite disappointing numbers from 21st Century Fox legacy units, including the Star TV satellite platform in India, Iger stressed that the company remains bullish on the $71.3 billion Fox deal.

“Our appreciation of the long-term value that we can create has increased,” Iger said.

Disney Plus will launch with more than 300 movie titles on day one, growing to 400 by the end of its first year. The tall includes eight “Star Wars” pics, four from Marvel plus eight more by the end of year one, 18 Pixar-produced features, 70 from the Disney animation vault and some 7,500 episodes of television. Iger said the Disney Plus originals are coming in strong. He’s watched the first season of “The Mandalorian,” the “Star Wars”-themed live-action series.

“I’ve been really impressed with the quality and the variety and the volume” of original production for Disney Plus, Iger said.

Iger also emphasized Disney’s flexibility with the content it creates. The FX team may produce an original series for Hulu that will have a second window down the road on FX.

Iger acknowledged that the company faces a “balancing act” in the near term as it weighs how much to invest in its new direct-to-consumer businesses and how much it needs to maintain its traditional linear TV operations including ABC, Freeform and FX.

“It is important for us to continue to fuel those channels with enough quality and original programming to support these businesses as they exist today,” Iger said. At the same time, “the pivot to direct to consumer businesses is designed not only to address the opportunity that exists in that space but also address the challenges that exist on the traditional side.”

Iger added that Disney is in the midst of “setting ourselves up in a way to be more resilient than any of our competitors should the traditional side erode so significantly that it is not as viable as it was.”

“When you look at the capacity inside of the Walt Disney Company to create content, the IP that’s there, the access we’ll have with that is, you know, terrific. We are going to be able to invest more and invest more upstream and find the best stories and the best creators to make shows for the company,” CEO Randy Freer told Julia Boorstin Tuesday on CNBC’s “Squawk Box.”

Freer, who took the helm at Hulu in 2017, told CNBC’s the company’s “investment in original programming will increase significantly.”

Representatives for Hulu clarified that investments would be less about spending money and more about refocusing the company’s resources. In the past, Hulu has concentrated on acquiring content, but with a powerhouse like Disney behind the streaming service, it can now put more effort towards creating its own.

A source close to the matter said Hulu’s programming budget will remain in line with the guidance Disney provided during its investor day in April.

Hulu already has a slate of original shows including the Emmy Award-winning “Handmaid’s Tale” as well as “Catch 22,” “Ramy,” “The Act,” “Pen 15,” and “Shrill.”

Ahead of Disney securing a controlling stake in the streaming service, Hulu had already green lit two live-action Marvel shows — “Ghost Rider” and “Helstrom” — as well as a slate of four animated series featuring Marvel superheroes, including Howard the Duck.

As entertainment giants like Warner Bros. and Comcast enter the streaming game, having a brand like Hulu is an asset for Disney. Not only does it have proprietary programming, but it also has a live-TV feature as well as the option for ad-supported viewing.

Disney has also discussed bundling its ESPN+ programming and its upcoming Disney+ streaming service with Hulu, but it has not disclosed how much this bundle would cost or when it would become available. Disney+ will launch on Nov. 12.

Disney’s deal extends NBCUniversal’s licensing agreement to provide Hulu shows over the next three years, but in one year NBCUniversal can start putting some of its content on the free streaming service it plans to launch next year.

Hulu Outpaces Netflix

Hulu is quietly amassing subscribers in the U.S. at a pace much faster than Netflix.

Hulu added twice as many U.S. subscribers as Netflix in the first quarter of 2019. In the quarter, Hulu added 3.8 million domestic subscribers compared with Netflix’s 1.74 million domestic net additions.

In 2014, Hulu only had 6 million subscribers, but by the end of 2018 the company’s subscriber base had swelled to over 25 million – an astonishing 316% growth over the last four years. Currently, Hulu has over 28 million subscribers; a long way to go to catch Netflix’s 60.2 million U.S. subscribers.

With around 125 million households in the United States, there is reason to believe that Netflix has reached near saturation, especially as several major studios pull popular content from the platform in preparation of launching stand-alone streaming services of their own.

A large part of the Hulu’s success, and appeal for attracting new subscribers, is its ability to provide shows from ABC, Fox, and NBC during the current television season.

Pricing Wars

Beginning in February, Hulu lowered its pricing for its most popular plan from $7.99 to $5.99 per month. Hulu’s announcement came one week after Netflix said it would raise the price of its most popular plan from $10.99 to $12.99 per month.

Hulu also offers a live TV option with Hulu on-demand for $45 per month. 

Disney+ will launch on November 12th costing subscribers $6.99 per month; half the price of Netflix. Besides a huge collection of films from Disney Animation, Pixar, Marvel, and Lucasfilm, subscribers will have access to 25 episodic series from Disney and Fox.

Clown Co. History

Before Disney’s acquisition of Fox, Hulu’s ownership was held in roughly 30% equal shares by Disney, Fox, Comcast (NBCUniversal), with Time Warner (now WarnerMedia) holding 9.5%. 

Disney became the majority owner of Hulu with 60% ownership when the takeover of Fox was completed, thus leaving Comcast with 30% share and WarnerMedia with 9.5%. 

In mid-April, AT&T, WarnerMedia’s new owner decided to sell its minority share to Disney for $1.43 billion – valuing Hulu at $15 billion. This proved a profitable investment for WarnerMedia who originally purchased its stake in 2016 at a valuation of $5.8 billion. 

Last week, Comcast decided to cede full control of Hulu to Disney. Comcast will remain a silent partner with 33% interest, but Disney will solely run the streaming service and maintain a 66% equity stake.

Comcast and Disney decided to share proportionally in the purchase price from WarnerMedia, which increased Comcast’s stake from 30% to 33% and Disney’s from 60% to 66%.

Under the terms of the deal, Comcast can require Disney to buy its 33% share, or Disney can make Comcast sell its stake as early as 2024 for a minimum valuation of $27.5 billion. This future valuation is almost double the $15 billion value just agreed upon under the WarnerMedia deal last month.

All future capitalization needed for Hulu, either through debt or equity, will most likely be funded by Disney. However, Comcast can participate, but if it doesn’t its share will be reduced, but not below 21%.

FilmTake Away

Disney is taking direct aim at Netflix, which should worry the longtime streaming leader. 

In addition to being the box office champ over the last decade, Disney will use Hulu to offer live television and streaming of more mature content from Fox and FX. This will allow the company to save its family-oriented content for Disney+, its new streaming service launching in November.

Also, as the owner of ESPN, Disney can dominate sports programming with its new streaming service ESPN+. Live sports is the biggest (and maybe only) driver for live television. Disney confirmed that it will offer a bundle of all three services – Disney+, ESPN+ and Hulu.

Netflix already has much to worry about with nearly $19 billion in streaming content obligations and its $12.4 billion debt load; Netflix is digging a hole that is surpassing $30 billion. 

To make matters worse, Netflix’s market capitalization is $154 billion, but its stock trades at a mind-blowing 127 times earnings. Comparatively, Disney’s market capitalization is $241 billion, but only trades at 15 times its earnings.

Disney and Comcast announced a deal under which Disney will assume full operational control of Hulu, effective immediately. Within five years, Comcast has agreed to sell its Hulu stake to Disney for at least $5.8 billion.

Under the deal, Comcast’s NBCUniversal will continue to license content to Hulu through late 2024. However, as soon as next year, NBCU will have the right to pull back programming previously licensed exclusively to Hulu (continuing to make it available to Hulu on a nonexclusive basis for a reduced licensing fee). And by 2022, NBCUniversal will have the right to cancel most of its content-licensing agreements with Hulu. NBCU is planning to launch a free, ad-supported streaming service next year.

 “We are now able to completely integrate Hulu into our direct-to-consumer business and leverage the full power of The Walt Disney Company’s brands and creative engines to make the service even more compelling and a greater value for consumers,” Disney chairman/CEO Bob Iger said in a statement about the pact.

With full operating control, Disney will have the latitude to set a new strategic road map for Hulu — including launching the service internationally.

Comcast/NBCU will retain its 33% ownership interest in Hulu. As early as January 2024, Comcast can require Disney to buy NBCU’s interest in Hulu. By the same token, Disney can require NBCU to sell its interest to Disney for its fair market value at that time, the companies announced Tuesday.

Disney has guaranteed a sale price for Comcast’s stake in Hulu that will represent a valuation for the streaming-video joint venture of at least $27.5 billion. The companies said that when the sale of NBCU’s stake occurs in 2024, Hulu’s fair-market value will be “assessed by independent experts.”

NBCU CEO Steve Burke called the Hulu deal with Disney “a perfect outcome for us.”

“We believe strongly in the direct-to-consumer space and our content is a key driver of that ecosystem,” Burke said in a statement. The extension of the Hulu content-licensing agreement “will generate significant cash flow for us, while giving us maximum flexibility to program and distribute to our own direct-to-consumer platform, as we build that business. Significantly, this transaction also affirms the value of our stake, provides a path to liquidity and ensures our continued equity participation in Hulu’s success.”

Comcast agreed to extend the Hulu license of NBCU content and the carriage agreement for Hulu’s live TV service for NBCU channels until late 2024 and also to distribute Hulu on its Xfinity X1 platform. But it can nix most of the licensing agreements by 2022, the companies said. NBCU’s streaming service, set to bow next year, will feature “new originals and a gigantic library of old favorites… The shows that viewers stream the most are coming home,” Linda Yaccarino, NBCU chairman of advertising and client partnerships, said at the programmer’s upfront event Monday.

Last month, AT&T sold its 9.5% stake in Hulu to Disney and NBCU for $1.43 billion, valuing Hulu at $15 billion. Disney and Comcast agreed to allocate that purchase on a pro-rata basis, giving Disney a 66% ownership and Comcast/NBCU a 33% equity stake.

Disney secured 60% ownership of Hulu after it acquired the entertainment assets of 21st Century Fox for $71 billion, and was actively looking for a path to securing 100% of the company in talks with Comcast.

What Comcast’s Hulu ownership stake will be worth in five years is subject to how much money it continues to invest in the JV.

Comcast will have the option to fund its proportionate share of Hulu’s future capital requirements, but the conglomerate isn’t required to do so. Hulu has been investing more — and losing more — over the last few years. For 2018, Hulu lost around $1.5 billion, up from $920 million a year earlier, as calculated based on the proportionate loss reported by Comcast. According to Disney, Hulu’s capital funding calls to its two remaining parents will be capped at $1.5 billion per year (and if it requires more than that, Hulu will fund that via non-diluting debt).

If Comcast chooses to not continue funding Hulu going forward, its share will be diluted. Regardless of that decision, Disney has agreed that Comcast’s ownership interest in Hulu will never fall below 21%; in other words, Disney has guaranteed it will pay Comcast at least $5.8 billion to buy out the Comcast/NBCU stake.

Disney sees Hulu as a key pillar in its direct-to-consumer strategy, serving as a home to more adult-oriented entertainment fare alongside the upcoming Disney Plus (launching in November in the U.S.) and the ESPN Plus sports package. Disney says it’s likely the trio of streaming services will be bundled together at a discount at some point.

At the Disney Investor Day on April 11, Disney CFO Christine McCarthy projected Hulu’s paid subscriber base will hit up to 60 million by the end of fiscal year 2024. That would be more than double the 26.8 million paid subs Hulu announced it had as of earlier this month (up 16.5% from the end of 2018).

McCarthy also told analysts that Disney expects Hulu’s operating losses to peak at $1.5 billion in Disney’s fiscal year 2019 (which ends in September), with Hulu achieving profitability potentially as soon as fiscal year 2023.

Hulu doesn't report official numbers — and declined to comment for this story — but some rough math of write-downs by Comcast, Disney and Twenty-First Century Fox puts Hulu's annual losses in the neighborhood of $1.5 billion. Each company owns 30 percent of Hulu.

Comcast, which also owns CNBC-parent NBCUniversal, and Fox both attributed losses to Hulu that had doubled from the year-ago quarter. Comcast posted a $107 million loss from Hulu and Fox posted a $127 million loss.

Four quarters of losses that size, accounting for the companies' shares, puts annual losses for Hulu between $1.3 billion and $1.6 billion. Research firm BTIG in February estimated Hulu's 2017 losses at under $1 billion.

Disney, the only company of the three not to break out losses for Hulu, noted repeatedly in its earnings release and on the company's earnings call that financials dipped for the fiscal third quarter in part due to "higher losses from Hulu."

And yet, Disney is about to double its stake in Hulu once it closes its proposed acquisition of Fox. A representative for the company wasn't immediately available to comment for this story.

If anything, the willingness to take on double the losses is credit to Disney's ambitions in streaming and over-the-top, direct-to-consumer content.

The company last year announced plans to launch an in-house streaming service to compete with industry leader Netflix. But the company has said it'll be at least another a year before launch, and drawing eyes from incumbents will take time.

"[CEO Bob] Iger seems committed to Hulu," Argus Research Analyst Joe Bonner said in an email to CNBC. "As he should be since it's an OTT streaming platform that is already up and running, rather than the prospective one that management is currently promising for the end of next year and even if delivered on time will take years to build a subscriber base."

Hulu executives have warned shareholders of growing losses as the company invests in building a subscriber base to rival Netflix's. In May, the company announced it had surpassed 20 million American subscribers, having added 3 million subscribers since January.

Netflix, for comparison, reported 57 million U.S. subscribers for the last quarter, an increase of fewer than 1 million subscribers over the three-month period.

"Investing in Hulu right now is probably money well spent and should not significantly impair [Disney's] balance sheet," Bonner said.

Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com. Comcast is also a co-owner of Hulu.

Now Hulu looks like it is headed for another change: If the Disney-Fox deal goes through, Disney will own a two-thirds stake in the business, and Disney CEO Bob Iger says Hulu will play a big role in his company’s future. (Though some industry observers think Comcast, which owns a third of Hulu, will end up controlling it, perhaps because regulators will force Disney to sell it, and/or because it will be more important to Comcast’s digital plans than Disney’s.)

Anyway. How’s Hulu doing for now? Hard to tell: The company used to provide quarterly updates under former CEO Jason Kilar, but stopped doing that a while ago.

Today, though, it is showing a bit more leg: The company says it has 17 million subscribers, up from 12 million in 2016.

Make that a tiny bit of leg, because that stat comes with two big caveats:

• Hulu’s 2017 number includes both its core subscription service, which costs between $8 and $12 a month, depending on whether you want to watch commercials along with “The Handmaid’s Tale” and reruns of “This Is Us” and its Hulu Live pay TV service, which launched last May and costs $40 a month. Hulu hasn’t released numbers on that one before, but industry estimates pegged its subscriber totals at around 300,000 last fall.
• Also note that the company’s last disclosure was in May 2016, so that five million bump presumably took something like 1.5 years.

So this chart is useful, but also misleading. Enjoy it with chunks of salt.

Context: Netflix told Wall Street it expects to add at least 4.6 million domestic subscribers in 2017, which would give it some 52 million subs in the U.S.

Starting Wednesday, Switch users can download Hulu directly from the Nintendo eShop and subscribe to Hulu’s core $7.99 streaming service or its $39.99 live TV plan, Richard Irving, VP of product at Hulu, said in a blog post.

With the $300 Nintendo Switch, which debuted in March, users will be able to watch Hulu on the big screen at home or when they’re out and about as the hybrid device is the first home console that’s also portable.

“So, with Hulu now on the Nintendo Switch, all of your TV is truly in one place,” Irving wrote. “You can have a deeply personal experience in your living room or on the go, without having to change devices.”

Users have the option to add on premium channels like HBO, Cinemax, and Showtime, in addition to the more than 50 channels that come with Hulu’s live TV subscription, including ESPN, Fox Sports, CNN, FX, and Bravo.

Nintendo hasn’t indicated when other OTT video services might come to the Switch, though the company has said since the gaming hardware’s launch that services like Netflix could eventually make their way to the console, according to TechCrunch.

The announcement follows the introduction of Verizon's Go90 mobile video service, AT&T's bundling of HBO for wireless customers and, most recently, https://www.wirelessweek.com/news/2017/09/t-mobile-adds-free-netflix-unlimited-family-plan T-Mobile's offer of Netflix subscriptions to unlimited customers.

Sprint officials, however, suggested that its prices — $25 per line per month, or $100 per month for five lines—presented a more attractive option than its competitors.

Sprint and Hulu added that they soon plan to allow customers to upgrade to Hulu's live TV plan, which includes sports and news programming.

So far the supported Roku models include the Roku Streaming Stick, Roku Express, Premiere, and Ultra models, Roku 3, Roku 4, as well as all Roku TV models.

Last week Hulu announced it was rolling out a new UI to PlayStation 3 and PlayStation 4. In August the company brought its Live TV experience to customers’ laptops and PCs via a new web browser interface. The new Hulu web experience is available without a plugin or extension on Chrome, Safari, Firefox, Microsoft’s Edge browser, and Internet Explorer 11 on select operating systems.

“To date, we’ve offered Hulu with Live TV on multiple living room and mobile devices, but we know many of you have asked to access our service on your laptops and computers as well,” Ben Smith, head of experience at Hulu, says in a product update. “So rather than wait until we’ve finalized our new web experience, we’re opening up a basic version to Hulu’s live TV plan subscribers so they can stream live TV via their browsers.”

Hulu Live includes live sports, news, events, and shows from more than 50 channels, including ESPN, CNN, and Fox Sports.

The deal combines Spotify Premium, with the basic-level Hulu plan, which includes ads. However with Hulu subscriptions costing $7.99 per month, and Spotify’s student plan costing $4.99 per month each separately, the latest offer is sure to appeal to budget-conscious students.

“In bringing Spotify and Hulu together, we’re now able to offer students — both the millions already on Spotify Premium, and those who are new to Spotify — access to the world’s best music, TV, and movie content in the simplest possible way,” Alex Norstrom, chief premium business officer at Spotify, comments. “We’re very excited to be partnering with Hulu — a like-minded company which is as focused as we are on delivering the very best in high quality streaming content.”

For now, only undergraduate students who are enrolled in a Title IV accredited college or university in the United States are eligible for the bundle.

However, Hulu indicates that this is only “the first step” both companies are taking to offer bundled services, “with offerings targeted at the broader market to follow.”

CNN and http://variety.com/t/hulu/ Hulu have struck a new content deal that will bring six series and two films produced by the Time Warner-owned cable-news outlet to the SVOD service, which is jointly owned by Comcast, 21st Century Fox, and Walt Disney. CNN’s parent controls a minority stake. This is the first such deal between CNN and Hulu for http://variety.com/t/cnn-films/ CNN Films, CNN’s nonfiction documentaries, and the second deal with CNN Original Series, the network’s brand for nonfiction series.

“This is a broad partnership, which I think will bring a lot of new viewers and fans to the content we’ve been putting out there.” said http://variety.com/t/amy-entelis/ Amy Entelis, executive vice president for talent and content development at CNN Worldwide, in an interview. The deal “does monetize the content and also extends the lifetimes of these series, which we feel are very, very high quality non-fiction series, and they can live on in multi-platform venues. It’s creatively satisfying to keep them out in front of people and keeping the conversation about them going.”

The new deal includes the film “9/11 Fifteen Years Later,” a co-production with Goldfish Pictures, available now, and ‘The End: Inside the Last Days of the Obama White House,’ a wholly original film production by the network, that will become available in July. CNN Films, launched in 2012, marks its fifth year anniversary later this year.

CNN Original Series previously sold streaming rights to Hulu for “Race for the White House” from executive producers Kevin Spacey and Dana Brunetti. This expanded deal for series content includes the first season of “The History of Comedy”; the first two seasons of “United Shades of America with W. Kamau Bell”; the first three seasons of “This is Life with Lisa Ling”; the first sesason of “Declassified: Untold Stories of American Spies”; the first three seasons of “The Hunt with John Walsh”; and the first season of “Crimes of the Century.” The majority of the content will become available to Hulu subscribers on a rolling basis this summer, with the exception “United Shades” and “The History of Comedy,” which will become available this winter.

“We are pleased to extend our partnership with a trusted brand like CNN,” said Lisa Holme, Hulu’s head of content acquisition, in a prepared statement. “Their powerful story-telling is best in class and we are very happy to offer even more of their programming to Hulu viewers.”

The two CNN Films show enterprise reporting in a documentary setting. In “9/11 Fifteen Years Later,”CNN Films collaborated with Gédéon and Jules Naudet and retired NYC firefighter James Hanlon for this anniversary edition of their “9/11,”recalling survivors’ stories of Sept. 11, 2001, and their lives since. The film features an introduction by actor and producer Denis Leary. In “The End: Inside the Last Days of the Obama White House,” CNN Films captures the twilight days of the Obama White House, featuring the voices of press secretary Josh Earnest, advisor Valerie Jarrett, speech writer Cody Keenan, chief usher Angella Reid, First Lady chief of staff Tina Tchen, and others.

Regardless of whether you are subscribed to Hulu’s basic subscription package with commercials or its new live TV service, linear and on-demand programming from the Time Warner-owned premium channels are now available. Timing is fortuitous for Hulu as HBO is on the verge of launching new seasons of some of its most popular series, including “Game of Thrones” and “Ballers.”Pricing for HBO is $14.99 and for Cinemax, $9.99, consistent with the cost of their standalone offerings, including HBO Now. HBO isn’t the first premium channel Hulu upsells to its subscribers; Showtime became the first such offering in 2015. Both HBO and Showtime are http://variety.com/2016/digital/news/hbo-cinemax-amazon-prime-1201931116/" target="_blank">already offered by another subscription VOD service, Amazon Prime.

“By combining HBO’s iconic programming with our world class user experience and deep content offering, Hulu is giving viewers easy and highly personalized access to the very best of television,” said Tim Connolly, SVP and head of distribution and partnerships at Hulu.“Hulu has been a pioneer in the television streaming business, building a robust user base by offering top-tier programming from a variety of networks,” said Sofia Chang, EVP of worldwide digital distribution and home entertainment, HBO.

“I don’t think we are designing this for people that are really happy with their pay TV service,” Hulu CEO Mike Hopkins told the NYT last year. “This is designed for the people that the marketplace is concerned are falling out of love with pay TV.”

Customers who subscribe to the beta of Hulu with Live TV can access live and on demand programming from more than 50 channels. They’ll also get Hulu’s existing streaming library (with commercials) for their 40 bucks. The service includes 50 hours of recording storage, up to six individual profiles, and two simultaneous streams per account, with options to upgrade to an enhanced cloud DVR and unlimited in-home screens.

Content from broadcast networks ABC, CBS, Fox and NBC is reportedly available “in many markets, with more to follow.” Other channels include CBS Sports, ESPN, Fox Sports, NBC Sports, TNT, regional sports networks, CNN, CNBC, Fox News, Fox Business, MSNBC, Bravo, E!, Food Network, HGTV, Travel Channel, A&E, Cartoon Network/Adult Swim, Disney Channel, Freeform, FX, History, Lifetime, National Geographic, TBS, USA Network, Viceland, and more.

More on pricing and programming options is available here.

This fall, Yahoo View will reportedly offer the last five episodes of ABC, NBC, Fox (eight days after original broadcast) and other network sitcoms, day-after clips and full seasons of anime and Korean drama. Those episodes, which have previously been available on the Hulu site should be gone from there in the next few weeks.

Tumblr fandom should be pleased to see the new site features a “beyond the episode” section that can visually block the enhanced content that might reveal spoilers about the current video playing, and picture-in-picture so viewers can continue to watch while browsing to other content without leaving the screen.

“As a TV junkie and Tumblr fan myself, I’m personally excited to have one place that brings together the best of free TV and Tumblr fandom,” Jess Lee, VP of lifestyles product at Yahoo, says. “Yahoo View is our first step towards creating a powerful community TV-watching experience, but it’s really only the beginning.”

View.yahoo.com is available in the U.S. via a PC.

Mobile web and mobile apps are slated to be available soon.

“We’ve seen awesome things happen when you add community and content together (think of the passionate communities on Yahoo Sports, Polyvore and Tumblr to name a few) and are excited to be taking this first step towards creating a powerful community TV-watching experience,” Lee adds on Yahoo’s blog. “Today’s launch is only scratching the surface of what’s possible, and we are looking forward to rolling out more content and community-related updates soon.”

More on this story is available at Wireless Week here.

The company has been creating buzz this week online with a report in the Wall Street Journal — which was then confirmed by the New York Times — that it’s aiming to develop a new skinny bundle subscription service of not only on-demand but live programming to take on traditional pay TV offerings. The bundle would reportedly include broadcast and cable channels, in particular those from 21st Century Fox, Walt Disney Company and Comcast NBCUniversal, which all co-own Hulu.

The WSJ report underlined that Hulu hasn’t set a price for the service, but added that a Sanford C. Bernstein media analyst estimated it probably would go for about $40 a month.

“I don’t think we are designing this for people that are really happy with their pay TV service,” Hulu CEO Mike Hopkins tells the NYT. “This is designed for the people that the marketplace is concerned are falling out of love with pay TV.”

Hulu also is announcing a partnership with interactive advertising company BrightLine at today’s advertiser event. It says it will allow it to be the first streaming service to deliver first-to-market interactive advertising units built exclusively for the living room and connected TVs.

A new collaboration with Nielsen is also being revealed that reportedly will enable digital ad measurement through Nielsen Digital Ad Ratings to capture OTT viewing in the living room environment for the first time ever.

“This will be the first comprehensive ad measurement solution to debut across living room platforms from Roku and PlayStation to Xbox and Apple TV and all Hulu-enabled living room devices,” Hulu reports in a statement. “Through the collaboration, Hulu will have the capability to deliver the accurate measurement of viewership beyond the PC for advertisers on a campaign level basis.”

In addition, Hulu announced it will begin to provide increased advertising effectiveness insights and tools through a new partnership with market research firm Millward Brown. The partnership will deliver studies, research papers and stats including brand affinity metrics for marketers and advertisers that will span OTT viewing environments.

The deal expands Hulu’s relationship with IFC owner AMC Networks; the pair already pacted last year on output deal for exclusive SVOD rights to new and upcoming primetime scripted drama and comedy series from AMC, IFC TV, BBC America, SundanceTV and WE tv. That included narrative features from sisters labels IFC Films, Sundance Selects and IFC Midnight.

The docu deal takes effect in the fall beginning with IFC Films’ King Georges, which hits theaters and VOD on February 26, and City of Gold, which follows Pulitzer-winning L.A. food critic Jonathan Gold, which will also become exclusive to Hulu following its theatrical release March 11.

Including the three outlets, Time Inc. now works with 18 different partners that span more than 4,000 U.S. sites and platforms, the company said. Other partners in Time Inc.’s video network include Amazon/Amazon Video Shorts, CBS Local Digital Media, Gannett/USA Today, Vessel’s Video Service and Nextstar Broadcasting, AOL/AOLon, Cinesport, Scripps/ULive and Tout. Time Inc. plans include expanding the network internationally.

“The goal is telling stories in video and take them to as wide an audience as possible,” said J.R. McCabe, senior vice president of Time Inc. Video, in an interview. “These partnerships allow us to do that.”

Recent Time Inc. video premieres include “Building Hope,” a five-part series honoring military veterans from Southern Living; “A Year in Space,” a documentary series from Time’s Red Border Films, featuring a behind-the-scenes look at the life of NASA astronaut Scott Kelly, the first person to have spent a year in the International Space Station; “New Orleans Here & Now,” a six-part anthology on New Orleans 10 years after Hurricane Katrina, which was executive produced by Academy Award-nominated actress Patricia Clarkson and Golden Globe winner Scott Bakula and was created in partnership with Rampante; and the soon-to-be-released Season IV of the Sports Emmy-nominated series Underdogs from Sports Illustrated.

The company will soon introduce a state-of-the-art production studio at its new headquarters at 225 Liberty Street in New York.

In 2015, Time Inc. secured more than 1 billion video streams across the network. According to an October report from comScore, Time Inc. Video has recorded year-over-year gains of 86% in unique views, and 388% in total views.

In addition, Hulu said it will produce original content and curate films for VR platforms, starting with a short film as a bonus feature for series “RocketJump: The Show.”

Netflix said it worked with Facebook’s Oculus VR to develop an app for Samsung Gear VR, set togo on sale this fall for $99. The app features the “Netflix Living Room” (pictured above), which provides a user interface designed for the virtual-reality headset.

“A year ago, I had a short list of the top things that I felt Gear VR needed to be successful. One of them was Netflix,” Oculus CTO John Carmack wrote in a blog post on Netflix’s site. “Despite all the talk of hardcore gamers and abstract metaverses, a lot of people want to watch movies and shows in virtual reality.”

Hulu’s VR app, meanwhile, will feature immersive 3D environments that will allow subscribers to stream the service’s 2D library as well as original VR content. Hulu expects to release the app this fall; which platforms it runs on have yet to be announced.

Hulu’s first original VR short film is “The Big One,” which will launch as a companion to the series from Lionsgate and Freddie Wong’s RocketJump studio chronicling his filmmaking escapades. “The Big One,” about a meteor shower that turns into an apocalyptic nightmare, is being produced by Lionsgate in conjunction with RocketJump and VR startup WEVR.

Hulu and Epix said on Sunday they had signed a multi-year deal that would bring Epix films to Hulu from Oct. 1. The companies did not disclose terms of the deal.

Netflix Inc said earlier on Sunday it had decided not to renew its agreement with Epix when it expires at the end of September as it focuses more on original programming and exclusive rights to movies, and less on non-exclusive content.

“While many of these (Epix) movies are popular, they are also widely available on cable and other subscription platforms at the same time as they are on Netflix,” Ted Sarandos, chief content officer at Netflix, wrote in a blog post.

“Through our original films and some innovative licensing arrangements with the movie studios, we are aiming to build a better movie experience for you.” (nflx.it/1hNH1X7)

Hulu and Epix said their deal would bring new releases from Lions Gate Entertainment Corp, MGM Studios Inc and Viacom Inc’s Paramount Pictures to Hulu.

Epix is a joint venture of the three studios, while Hulu is owned by Comcast Corp’s NBCUniversal, 21st Century Fox Inc’s Fox Broadcasting and Walt Disney Co’s ABC. (Reporting by Parikshit Mishra in Bengaluru; Editing by Ted Kerr)

AT&T said that later this year, its customers will be able to access Hulu through AT&T websites and also on mobile devices through AT&T apps.

AT&T also said it talking with Hulu about integrating access to Hulu into a TV-based app.

CED asked if that means that AT&T will be able to make Hulu available to either AT&T Wireless subscribers or AT&T U-verse subscribers, or both. An AT&T spokesman responded in an e-mail:

“This will be available to all AT&T customers in the future. Customers subscribing to Hulu through AT&T will have access to all existing Hulu apps. They will also be able to browse and search for Hulu content from within the AT&T apps. Combined with AT&T’s existing VOD catalog, customers will be able to see all episodes of their favorite shows in one place, both current and past seasons.”

So… maybe both?

As with other service providers making Hulu available directly, AT&T subscribers will still be subject to Hulu’s monthly fee in addition to their AT&T subscription.

AT&T is also partners with The Chernin Group in Otter Media, established to invest in, acquire and launch over-the-top (OTT) video services. This includes its purchase of a majority stake in Fullscreen.

Hulu entered similar deals with Armstrong, Atlantic Broadband, Mediacom Communications, Midcontinent Communications and WideOpenWest (WOW!).

Last week, Cablevision was the first cable operator to go direct with Hulu (story **here**).

The MSOs’ subscribers will still need to subscribe separately to the over-the-top providers, but will be able to access those services directly through their providers’ set-tops, rather than having to hook up some other device (e.g., and OTT set-top or a game console) that would host the Netflix and/or Hulu apps.

“We believe Hulu is the perfect complement to Mediacom’s Internet service offerings,” said Mediacom executive vice president of operations John Pascarelli. “Hulu brings a robust video selection to our customers who want to supplement their traditional cable service with online content at home or on the go.”

Hulu senior vice president of distribution Tim Connolly said, “Even with the rapid growth in streaming video, there is a huge audience that consumes television through the innovative services provided by cable providers, like Mediacom, and we want to be there for them too.”

While Hulu attracts 30 million monthly uniques and 6 million consumers signed on for subscription service Hulu Plus, the company has been surpassed in buzz, breakout content and critical acclaim by competitors including Netflix, Amazon and HBO Go/HBO Now. “Suddenly for Hulu,” said McQuivey, “it’s either put up or shut up time.”

As Hulu prepares for its April 29 NewFronts presentation, it is squarely in the “put up” column, celebrating major coups in terms of both original series (including 11/22/63, a limited series from J.J. Abrams and Stephen King) and acquisitions (exclusive SVOD rights to all 18 seasons of South Park). “We have a mandate to swing for the fences,” said Craig Erwich, svp, head of content for Hulu. “There has definitely been a mandate to get in business with the best talent that’s available, support them creatively and financially, and be ambitious in terms of talent and creative vision.”

To that end, Hulu has spent much of the past six months making one major content announcement after another. The biggest by far was 11/22/63, based on King’s best-selling novel from 2011 about an English teacher (James Franco) who finds a time portal and tries to prevent President John F. Kennedy’s assassination. There’s also Difficult People, a sitcom executive produced by Amy Poehler and starring Billy Eichner; Casual, a comedy exec produced by Jason Reitman; and The Way, a drama exec produced by Friday Night Lights and Parenthood showrunner Jason Katims.

“On the acquisition side, we are acquiring the best of the best,” said Erwich, referencing “landmark” SVOD deals for South Park, several present and future FX series (including Fargo and The Strain) and Empire, this season’s biggest new series. “So anything we do on the originals side has to measure up.”

In the process, Hulu hopes to finally land the signature series that has long eluded it.

“These new shows stand to really crystallize the Hulu brand in the hearts and minds of not only viewers but also advertisers, in a way that Mad Men may have crystallized AMC or what House of Cards did for Netflix,” said Peter Naylor, svp, advertising sales at Hulu. “So I couldn’t be given a better slate of programming to bring to market, especially in a crowded upfront/NewFronts season where everyone’s trying to turn people’s heads.”

Hulu knows it needs more than marquee names to keep pace with Netflix and Amazon. “Deservedly so, J.J. Abrams and Amy Poehler get you sampled and noticed,” said Erwich. “But the shows have to stand on their own.”

Of course, when you take big swings, there’s the potential for big misses. “Hulu has to be committed to a good couple of big swings in a row,” said McQuivey. “And if all of them miss, then you fall back on a distribution strategy.”

Not gonna happen, insists Hulu, which just pulled off yet another huge deal last Thursdaywith Turner, acquiring exclusive SVOD rights to a variety of TNT, TBS, Adult Swim and Cartoon Network series, including The Last Ship, Aqua Teen Hunger Force and Robot Chicken. “We have a lot of momentum,” said Erwich, “and we plan on continuing to capitalize on it.”

Forty-seven percent of all U.S. households subscribe to Netflix, Hulu Plus, Amazon Prime or a combination of these services, and 49 percent of all households have at least one TV connected to the internet, according to a new study from theLeichtman Research Group about emerging video services. Four years ago, only 24 percent of all households had an internet-connected TV.

That combination of connected TVs and internet video subscriptions is increasingly shaping what we are watching. Forty-nine percent of all Netflix subscribers watch online video programming on a connected device every week, compared to only eight percent of viewers who don’t subscribe to Netflix. And 78 percent of all Netflix subscribers watch their videos on a TV.

Thirty-four percent of the people quizzed for this study said that they watch online video every day, and 61 percent do so every week.

The big and hotly debated question is once again: What effect does all of this have on cable TV? Netflix CEO Reed Hastings has said time and again that his company’s service is complementary to, and not replacing, traditional pay TV — but the Leichtman Research numbers seem to suggest that is is starting to change: In 2010, 88 percent of Netflix subscribers also had pay TV. Fast forward to 2014, and that number is down to 80 percent.

At the same time, the number of cord cutters who also subscribe to Netflix is rising, from 16 percent in 2010 to 48 percent in 2014.

Leichtman’s numbers are echoed by a recent Consumer Electronics Association(CEA) study about the market for U.S. television services. 45 percent of all U.S. TV households watch internet content on their TVs, according to that study. The use of internet TV programming steeply increased from 28 percent in 2013.

Only five million U.S. TV households rely exclusively on internet TV, according to the CEA, but 10 percent of all TV households said that they’re likely to cancel that service in the next 10 months. Altogether, a total of 17 million TV households already don’t subscribe to traditional pay TV, but instead rely on antennas, the internet or a combination of both for TV programming.

Hulu is the latest company to go all-out on Chromecast-like multiscreen features: Hulu Plus subscribers can now access the video service through their Android and iOS devices on Microsoft’s Xbox One as well as Sony’s PS3 and PS4. Support for additional devices will follow in the coming months, according to a blog post, in which Hulu Senior Development Lead Mitch Walker described the feature this way:

“Simply launch the Hulu Plus app on your iOS or Android mobile device, and your gaming console system will be detected directly through the app. Once detected, a “cast” button will appear on your mobile phone or tablet and you can pair it with your living room device.”

Users can then cast videos directly from their mobile device to their game console, and also control playback much in the same way they would if they were going to watch the video on the mobile device itself.

Check out a video demo of the new feature below:

Those are pretty much the same type of features that Hulu launched on Google’s Chromecast streaming stick, but in this case, it isn’t using Google’s Cast SDK. Instead, Hulu is relying on technology it built in-house.

The added engineering effort explains why relatively few companies have taken Chromecast-like remote control features beyond Chromecast itself. With the exception of this new Hulu launch, YouTube and Netflix are the only big publishers that have brought cast capabilities to devices like Roku as well as Blu-Ray players, game consoles and smart TVs.

YouTube’s and Netflix’s efforts are in part based on DIAL, a multiscreen discovery protocol that was jointly developed by both companies. Hulu didn’t use DIAL for the ability to cast to game consoles, but will implement the protocol to add the same functionality to additional devices in the coming months, according to a spokesperson.

LG recently proposed a new open multiscreen SDK to simplify the use of DIAL for other publishers that don’t have the same engineering resources.

This post was updated at 11:25am with additional details on the technology used by Hulu to bring casting to game consoles.

He said that the content community will earn about $300 million via Hulu over the course of 2011.

“As a young company, we’re excited about that number and we also expect it to grow aggressively in the years to come,” he said.

Kilar also said that the venture’s revenue grew approximately 90 percent in the first quarter of the year over the same period a year earlier. He didn’t specify a figure.

The company, which celebrated its third anniversary since the public launch of Hulu.com on March 12, served 289 advertisers in the opening quarter of 2011, up about 50 percent from the 194 in the year-ago period.

Users initiated 10 percent more streams in the latest quarter than in the closing quarter of 2010.

“Given the ongoing discussion around the evolution of premium content distribution — and Hulu’s role in it — we thought it would be worthwhile to share some of our progress from the first 90 days of 2011,” Kilar said in explaining the reason for the update.

Earlier this year, a Kilar blog post that argued that traditional TV has too many ads and isn’t as effective as his firm’s ads caused an uproar among Hulu owners.

On Monday, Kilar also said that Hulu also grew the number of content partners to Hulu Plus and Hulu to 264 in the first quarter, up from 211 in the year-ago period, with latest additions including brands from Viacom, such as Comedy Central.

“It is still very early days for online video, and our biggest opportunities/challenges are clearly still in front of us,” said Kilar. “We’re thankful for -- and humbled by -- the response we’ve received these past 90 days from our users, advertisers, and content partners.” SOURCE: www.hollywoodreporter.com

The free online television service has become one of the most-watched online video properties in the U.S. and a top earner of web-video ad dollars since its 2008 launch.

But its owners—industry powerhouses NBC Universal, News Corp. and Walt Disney Co.—are increasingly at odds over Hulu’s business model. Worried that free Web versions of their biggest TV shows are eating into their traditional business, the owners disagree among themselves, and with Hulu management, on how much of their content should be free.

Fox Broadcasting owner News Corp. and ABC owner Disney are contemplating pulling some free content from Hulu, say people familiar with the matter. The media companies are also moving to sell more programs to Hulu competitors that deliver television over the Internet, including Netflix Inc., Microsoft Corp. and Apple Inc.

And in what would be a major shift in direction, Hulu management has discussed recasting Hulu as an online cable operator that would use the Web to send live TV channels and video-on-demand content to subscribers, say people familiar with the talks. The new service, which is still under discussion, would mimic the bundles of channels now sold by cable and satellite operators, the people said.

Hulu’s managers say tumult is natural in such a fast-changing industry. “When we blaze trails, which is what Hulu is about, it takes time,” said Jason Kilar, Hulu’s chief executive, in an interview. “That is not for the faint of heart, and we understand that.”

When it launched three years ago, Hulu was the networks’ answer to Google Inc.’s video-sharing site YouTube. It provided an easy—and legal—way for viewers to watch new TV shows online whenever they wanted for free. It now offers more than 30,000 television episodes, and its new Hulu Plus subscription service lets users watch on Internet-connected TVs and portable devices like the iPad.

But the digital landscape is changing so fast that Hulu’s future is unclear. The networks are grappling with a dilemma facing all entertainment companies: how soon to release movies or shows online without destroying their value in other lucrative “windows” such as DVDS or reruns on cable TV—and at what price.

After upending the music and publishing industries, the digital revolution is poised to shake up TV in earnest this year. As more viewers watch TV and movies on the Internet, industry executives say a generation of TV watchers may never sign up for cable or satellite television, turning off the spigot of monthly fees that have helped support TV for over 30 years. Broadcasters such as those behind Hulu, cable TV operators, and even TV hardware makers such as Sony Electronics are scrambling to figure out their role in the new Internet television universe.

The number of U.S. households that pay for TV service from cable, satellite or phone companies dipped for the first time last year after decades of growth, with 335,000 fewer households paying for service between the first and the third quarters, according to research firm SNL Kagan.

In last year’s fourth quarter, the number of people between ages 18 and 49 watching any kind of TV on a traditional set was down about 1.3% from the previous fall, according to Nielsen Co, the biggest decline in at least four years.

At the same time, Internet viewing has increased. U.S. consumers watched about three billion videos on websites offering TV shows in December, up 96% from a year earlier, according to comScore Inc. Hulu alone saw the number of videos it showed double in that period.

Hulu’s owners all agree that “consumer behavior is changing” toward more time on Internet-connected devices, said Mr. Kilar. “If you’re a content owner, you’re at risk of being left behind.”

But they can’t agree on the best way to capture the new audience.

“It remains unclear what the business model is” for Hulu, said Bruce Rosenblum, head of the television arm of Time Warner Inc.’s Warner Bros. studio. “At some point, if enough people turn off cable, then you’ve got a complete disruption of the business model,” he said.

When Hulu was created in 2007, NBC Universal and News Corp.—which also owns The Wall Street Journal—were concerned about the growing influence of YouTube and pirated copies of their programs showing up on the Internet. Hulu aggregated the networks’ TV shows online and made money by selling advertising.

The partners hired Mr. Kilar, former general manager of Amazon.com Inc.’s North American media business, giving him autonomy to chart a new course. Mr. Kilar, 39, was determined to create an independent corporate culture closer to the tech world than the tradition-bound television business.

The company built a Silicon Valley-inspired startup in a low-slung office park in Santa Monica, a few miles west of its Hollywood owners. In the break room, engineers modified a refrigerator to house a beer keg, cutting a hole in it to fit a special tap in the shape of Hulu’s logo.

Mr. Kilar gave new hires a culture manifesto, an 1,100-word document that paints Hulu as a frugal meritocracy where “Fruity Snacks boxes hold up our monitors,” but where everyone has a “neurotic focus on quality.”

In an office expansion, Mr. Kilar and senior managers gave up their offices to sit at desks in an open floor plan among hundreds of employees, underscoring Hulu’s egalitarian approach.

It wasn’t long before the new venture clashed with owners’ established ways.

In 2008, ad-sales executives at both Fox and NBC complained to their bosses that Hulu was cutting into sales on the networks’ own websites like Fox.com or NBC.com.

The protests fell on deaf ears. News Corp.’s then-president and chief operating officer, Peter Chernin, and NBC Universal’s Chief Executive Jeffrey Zucker defended Hulu as part of a larger strategy to build their online business.

The strategy drew viewers. A slick commercial in the February 2009 Super Bowl jokingly revealed Hulu as an extra-terrestrial plot to turn human brains to mush from excessive TV consumption. Hulu’s traffic skyrocketed, reaching 397 million U.S. video views in April, up 58% from January, according to comScore.

Mr. Kilar needed more content to show all his new customers. Hulu turned to Disney, offering the entertainment giant an equity stake in return for access to ABC programming. After months of wooing by Messrs. Chernin, Zucker and Kilar, Disney came on board in the summer of 2009. The company provided two years of exclusive access to TV shows—including “Grey’s Anatomy” and “Lost”—on the Web free with advertisements.

Soon, the stage was set for a showdown. News Corp. had announced that Mr. Chernin, an original creator of Hulu, would leave the company at the end of June. News Corp. named Chase Carey to be its new president and chief operating officer.

Mr. Carey had a very different vision for Hulu, according to people familiar with the matter. The former head of satellite operator DirecTV, Mr. Carey was a big believer in the subscription-TV business. He worried that online video would train a generation of people to expect entertainment for free with advertising. He thought Hulu should be supported by both subscriptions and ads, those people said.

The strategy conflicted with Hulu’s initial business model. While Mr. Kilar had talked about adding subscriptions since Hulu’s launch, people close to him say he thought the best way to build the business was to increase the audience by keeping much of the content free, supported by advertising.

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Among broadcast networks, pressure was building to increase revenue. Having seen their audience migrate to cable for years, the networks were becoming increasingly insistent about seeking monthly fees from cable and satellite operators who used their broadcast signals. The networks needed the fees to help pay for soaring production and sports-rights costs. But in tense negotiations, the cable and satellite operators had a big objection: Why would we pay you for content you make available free on the Web?

In 2009, Mr. Kilar hashed out a subscription model that would become Hulu Plus. The idea was a compromise: New TV shows would remain free with ads. Paying subscribers would be offered additional content, as well as the ability to watch Hulu on devices other than their computers.

At a meeting of Hulu owners at News Corp.’s Manhattan headquarters last April, Hulu’s management said it wanted Hulu Plus to offer access on multiple devices to full seasons of shows like ABC’s “Desperate Housewives,” leaving the most-recent episodes free with ads.

Some attendees said that didn’t go far enough. At one point, Peter Levinsohn, head of digital distribution for Fox Filmed Entertainment, contended the new paid service was not differentiated enough from the existing free one, according to people familiar with the meeting.

Andy Forssell, Hulu’s head of content acquisition and distribution, replied that Hulu would lose advertising if it restricted access to free new episodes.

Despite its privileged access to content, Hulu’s revenue is still small compared to the bigger TV ecosystem and emerging competitors such as Netflix. In 2010, Hulu reported revenue of more than $260 million, up from $108 million in 2009. Netflix, which also rents out DVDs, had revenue of $2.16 billion last year.

Hulu’s management prevailed that time. But owners and management would continue to differ on strategy.

In April, Disney unveiled software for Apple’s new iPad tablet computer, offering free access to some ABC television shows with advertisements. The service raised a conflict: Hulu already was planning to offer the paid Hulu Plus service on the iPad.

Some Hulu board members and staffers were stunned. Mr. Kilar called Disney’s chief executive, Robert Iger, to express concern, say people briefed on the call.

By last summer, eager to raise money to secure more content, Hulu management began discussing the idea of an initial public offering.

Hulu managers flew to New York in August to talk to investment bankers, some of whom estimated the company could go public at a valuation of around $2 billion. But to get such a handsome number, Hulu would need to lock up long-term access to its owners’ programming.

The owners, however, wanted to first nail down their own new license deals with Hulu, which are set to expire this summer. They didn’t want to conduct those negotiations while Hulu was under pressure to impress markets.

Board members, including Mr. Kilar, tabled the IPO in the fall and are now discussing raising capital through other methods. Hulu has asked the owners to invest more themselves, say people familiar with the matter, although it’s unclear whether they will do so.

By October, as Hulu Plus was about to launch to a wide audience, Mr. Kilar clashed again with the owners.

Hulu’s CEO worried that rival video service Netflix was gaining traction with a feature that allowed subscribers to stream movies and TV shows online on demand. Mr. Kilar proposed dropping Hulu Plus’s monthly subscription rate to $4.99 from $9.99.

In a conference call, Mr. Kilar told the media executives how critical his proposals were: He indicated he was prepared to leave when his contract expired if owners didn’t follow his recommendations, according to people familiar with the matter.

Both sides eventually compromised, and the owners agreed to a smaller 20% cut to $7.99 a month.

Hulu’s owners are now preparing to start negotiations for their new licenses. Discussions have included such concerns as whether giving Hulu exclusive content restricts the owners unnecessarily. News Corp. and Disney are also each mulling whether to wait two weeks or more after a TV episode airs before making it available free online, according to people familiar with the matter.

Meanwhile, the media companies have all struck deals to license TV shows to Hulu’s competitor, Netflix.

When NBC Universal recently gave new episodes of “Saturday Night Live” to Netflix, Mr. Kilar complained in a phone call with NBC’s Mr. Zucker, people briefed on the conversation said.

NBC Universal is being forced to relinquish its Hulu management rights as part of government conditions on its takeover by Comcast Corp. NBC Universal may be obliged to start making more deals with Hulu competitors as part of those conditions.

ABC, for its part, has quietly built a potential subscription-based service that could mirror the selection of ABC shows in Hulu’s subscription offering, according to people familiar with the plans. It remains unclear if it will launch the service.

Hulu’s owners are now considering management’s proposal to create a “virtual cable operator,” according to people familiar with the talks. If they decide to move forward, some form of Hulu’s free service would likely remain under such a plan. It is possible Hulu Plus could be folded into the new service, one of the people said.

Unlike the FCC, which simply votes on whether to approve based on conditions, DOJ filed an antritrust lawsuit today opposing the merger along with a proposed settlement that would allow it to go through. That **proposal** specifically includes this requirement:

Comcast must relinquish its management rights in Hulu, an OVD. Without such a remedy, Comcast could, through its seats on Hulu’s board of directors, interfere with the management of Hulu, and, in particular, the development of products that compete with Comcast’s video service. Comcast also must continue to make NBCU content available to Hulu that is comparable to the programming Hulu obtains from Disney and News Corp.

Comcast can maintain NBCU’s economic interest in Hulu. Whether it would have a vote in a possible IPO or any other financial areas is unclear. Whether it would retain its ownership is also unclear.

In a call with reporters, Assistant Attorney General Christine Varney said she was more concerned about the possible negative impact of having Comcast on the board. “Whether or not they remain investors is a commercial matter that they will sort out.” (The competitive impact assessment included in the Justice filings refers to Hulu as one of the “most successful” online video distributors, apparently based on its traffic.)

Comcast’s David Cohen posted the company’s version as part of its corporate blog post on the Hulu conditions:

Comcast/NBC Universal may retain its economic stake in Hulu. Comcast/NBC Universal has agreed to give up its voting rights and board representation rights for Hulu. Comcast/NBC Universal will continue to provide content to Hulu in a manner consistent with Hulu’s other broadcast network owners.

Speaking with reporters this afternoon, Cohen expressed no desire to sell the “minority” interest in Hulu (32 percent, to be exact)—and sounded fairly proud that divestiture wasn’t required despite the efforts of opponents to the deal. “We prefer to maintain ownership,” he said.

But he left the door open, noting later that because of the competition issues, Hulu is one of the NBCU investments that Comcast has the least information about.

(Chernin was one of Comcast’s pre-bid advisors following his departure from News Corp.)

Should Comcast eventually choose to sell, Hulu’s other equity partners—News Corp., Disney, Providence Equity—could divvy up the stake and may have first rights in that case.

What does Comcast have to do? The three NBCU board members will have to resign and the company formally will have to renounce certain rights. It will become a “passive economic investment.” The DOJ consent decree calls for Comcast to act on Hulu within 10 days of the final judgment.

The settlement also prevents Comcast anything but aggregated financial statements and info needed in NBCU’s rights to purchase advertising inventory; no “confidential or competitively sensitive information.”

As “people familiar with the matter,” a journalistic euphemism for “stakeholders intent on leaking very specific information,” told WSJ, the initial public offering that was in the works is off the table, “at least for now.” On the table: new subscription plans to complement Hulu Plus.

These two developments beg to be decoded further. Let’s dive in.

The fact that Hulu lacks long-term rights to its programming was “one reason” offered for the IPO postponement. That smells like a red herring given this wasn’t exactly a surprise to NBC Universal, News Corp. and Disney, primary stakeholders alongside Providence Equity Partners.

A likelier rationale: IPOs require consensus, and that’s not going to happen with this many cooks in the kitchen. There’s no shortage of issues the principals could be disagreeing on here, but let’s focus on the biggest question mark that has hovered over Hulu for about a year now: Comcast, which is about to take over NBCU’s stake, needs Hulu like a fish needs a bicycle.

A site that has built its fan base by offering TV episodes for free online is not of much use to a cable operator that wants to monetize that same window through VOD and TV Everywhere or Fancast or Xfinity or whatever cockamamie new name Comcast concocts next—all of which lack the brand power Hulu has built.

And so Comcast can’t simply pull the plug on Hulu. If it keeps its stake in the company, the best move is to steer it further in the direction of Hulu Plus, which has a subscription model and multiplatform presence that fits in with the cable operator’s drive toward authenticated viewing experiences.

And that may explain the second new development here, this talk of additional subscription models. Perhaps Hulu becomes the new face of TV Everywhere, with much less emphasis on the free catch-up programming opportunities on which Hulu made its name.

But that still leaves the matter of correcting one of Hulu Plus’ biggest problems: a skimpy selection. That’s why the WSJ tells us “the subscription offerings would entail Hulu securing rights to distribute content it doesn’t already have.” Hulu is on the hunt for more content, which could not be better news for content owners including some of Hulu’s stakeholders.

That means Hulu is not going to let Netflix or Google snap up all the content—the resulting bidding war will drive up the price of programming, perhaps to the point where digital doesn’t mean pennies anymore.

That’s not a bidding war Hulu necessarily wins. Which is just one of the reasons next year is going to be a make-or-break year for the service.

Could Hulu actually not exist at this time next year? It’s not like the new-media world hasn’t demonstrated a ferocity in recent years capable of killing even a great brand. But the irony is that Hulu’s old-media roots could be its saving grace: If there’s one thing a mogul never, ever does it’s walk away from a great brand.

Hulu Plus costs $7.99 per month, which is down from the initial price of $9.99 when the long-rumored pay model was first offered by invitation only in July.

Hulu CEO Jason Kilar wrote on his corporate blog that the company will reimburse customers from the preview period for the pricing difference in the next billing cycle, as well as offer a free week of viewing for new subscribers. Current Hulu subscribers will get a free two-week trial, as well as “friends” that they invite through the company’s referral program.

NBC Universal, News Corp. and Walt Disney jointly own Hulu. Once Comcast’s majority stake in NBC Universal clears its last hurdle later this year, the nation’s largest cable operator will also own a piece of Hulu.

While Hulu has consistently ranked high in the number of videos viewed each month, typically trailing only Google-owned YouTube, the online video provider has struggled to turn a profit. Hulu’s initial free model, which is still available but with limited shows, was ad supported. Rumors have also floated that Hulu is considering an initial public offering.

While Hulu is squaring off with the likes of Netflix and Amazon, traditional video providers are battling to keep subscribers within their respective realms. Verizon launched its Flex View mobile streaming service last week, while Comcast’s iPad remote application was announced earlier this week. Both Comcast and Verizon are working on adding TV streaming to their respective services.

Roku already features a wide palette of content, including professional baseball’s MLB.TV, Netflix streaming, and Amazon Video On Demand. With the inclusion of Hulu, a service missing from the newfangled Apple TVs, the Roku streaming player is now a very solid competitor against Apple.

Hulu Plus requires a $10/month subscription in order access content across a wide variety of portals, including iOS devices, connected TVs, gaming consoles and now the Roku. Apple TV will let users rent TV shows for $.99 a pop, but avid TV watchers may prefer an unlimited monthly plan from Hulu.

The other area the Roku is beating the $99 Apple TV is its price. Roku’s new line of boxes starts at $59 for built-in WiFi and 720p HD playback via HDMI. For $79, customers can access 1080p streaming, and at $99, a USB port for local file playback is added. The Apple TV, on the other hand, is only capable of 720p streaming. The new Roku boxes also feature a 7-second rewind feature, helping to cut down on stream buffer times when trying to quickly rewind a program.

Any little feature is certainly going to help, but the partnership with Hulu has propelled the Roku into the center of the fight for our living room entertainment. There’s no word yet on the stream quality, but so far Hulu Plus has only offered 720p to other devices. Regardless of this, however, Roku’s deal with Hulu is a big win for the company and makes the set-top box conversation much more interesting.

Hulu Plus, in case you’re wondering, is the premium, paid-for, subscription service newly offered by Hulu. We knew it was on its way months before any official details were revealed.

Hulu Plus finally launched at the end of June, with the $10-per-month service designed to sit happily alongside the free Hulu.com website.

Hulu Plus brings Hulu to a whole range of devices beyond the computer, with the PS3 and Xbox 360 games consoles, and the Apple iPad and iPhone early recipients.

However, as great as all this sounds, what do you actually get for your money? Research firm One Touch Intelligence decided to find out at this very early stage in the life of Hulu Plus.

The good news is that there are 28,418 episodes available through Hulu Plus. The bad news is that just 3,564 of these are Hulu Plus exclusives, with the other 24,854 also available on the free-to-watch Hulu. This equates to 88 percent of full episodic content. For clips, the figure rises to 98 percent.

The main reason for subscribing to Hulu Plus is, it seems, to gain access to more episodes of the shows which are already on Hulu.com. The only notable shows which are exclusive to Hulu Plus are Law and Order, My Name Is Earl, Prison Break, and 8 Simple Rules.

Whether these two bonuses — a few extra shows and a few thousand extra episodes of existing shows — is enough to persuade people to pay up remains to be seen. It is important to note, however, that Hulu is likely to keep adding content as time goes on, with two months clearly not long enough to make any serious conclusions.

Orly’s Note: They are reportedly the 2nd best revenue generator in the digital distribution space (2nd to iTunes which is #1) and companies such as BSide and CRM many others to distribute to them. HULU notes that clusters of programming work best.