The plan will come into effect later this year, when customers will be able to watch Hulu shows through the AT&T mobile app, as well as through the AT&T website. The two companies are also in talks over bringing a Hulu app to AT&T customers’ televisions.
AT&T expanding Hulu’s audience base
Any such TV app would be similar to those already planned by other distributors. The previous deal between the two companies concerned Hulu’s free content, but today’s expanded deal is aimed at bringing Hulu’s premium tier to a wider audience.
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AT&T is developing a new mobile app which will contain a selection of Hulu video clips. Customers who click on them will be redirected to the Hulu sign-up page, in an attempt to drive subscriptions.
The deal is the latest one that Hulu has reached with a variety of distributors, including Cablevision, Armstrong, Atlantic Broadband, Mediacom Communications, Midcontinent Communications and WideOpenWest (WOW!). Each of the companies plans to distribute the Hulu library via its set-top box.
As a result of these agreements, Hulu reaches far more potential customers and partners will also receive an undisclosed share of Hulu’s subscription revenue. It is thought that the deal with AT&T has negotiated along similar lines.
Traditional players adapting to changing market
AT&T is itself investing in other initiatives, including a joint venture with The Chernin Group known as Otter Media. The venture will focus on investing, acquiring and launching over-the-top video services. So far Otter Media has invested in a majority stake in Fullscreen, currently valued at $200-300 million.
Video streaming services such as Hulu, Netflix and Amazon are increasingly popular with people looking to end their expensive cable television subscriptions in favor of online service. Consumers are now able to handpick what they want to watch rather than paying for hundreds of channels which are of no interest to them.
AT&T’s rival Verizon is also expanding its over-the-top video offerings. Yesterday the company announced the purchase of AOL for $4.4 billion, and analysts believe that the move is largely motivated by a desire to improve Verizon’s upcoming over-the-top video business using AOL’s adtech expertise.