'The Handmaid's Tale': Why Stakes Are High for Hulu's First Potential Hit

The Elisabeth Moss starrer comes at a crucial moment for the streamer as its push into originals deepens and names of potential content chiefs are revealed.
George Kraychyk/Hulu
'The Handmaid's Tale'

Can The Handmaid's Tale do for Hulu what six years and hundreds of millions of dollars has not? The Elisabeth Moss dystopian drama, picked up straight-to-series following a bidding war with FX, is a key element in Hulu's effort to become part of the watercooler conversation, an effort that began with 2016 miniseries 11.22.63 and includes the upcoming J.J. Abrams-Stephen King anthology Castle Rock as well as 9/11 drama The Looming Tower.

The goal, says Hulu head of content Craig Erwich, is to transition Hulu originals "off the arts and entertainment pages and onto the culture pages," where rivals Netflix and Amazon regularly appear.

The buzz for Handmaid's Tale, which launches April 26 and takes place in a futuristic but simplified world in which fertility issues abound and women's rights are a thing of the past, comes at a crucial moment. Six years after entering the scripted space — and four years after a $750 million investment from its studio owners (Fox, Comcast and Disney) fueled a more significant push into originals — Hulu has yet to generate a breakout hit.

While such series as the Hugh Laurie drama Chance and the Hugh Dancy-Aaron Paul starrer The Path have been big studio swings and the comedy Casual got a Golden Globe nomination, none has become part of the zeitgeist. Netflix, meanwhile, has followed up House of Cards with several breakouts, including Stranger Things and 13 Reasons Why.

Hulu will next ramp up its comedy offerings with fare like a variety show fronted by Sarah Silverman, who will have a big presence at the streamer's May 3 upfront presentation. But scripted programming remains the biggest driver of Hulu's business, especially as it looks to grow its 12 million U.S. subscribers to compete with deep-pocketed Netflix (50.8 million U.S. members).

That ratchets up the pressure as Hulu searches for a new content chief to come in above Erwich, who will focus on original content. Execs said to have been in the mix include Michael Lombardo (formerly of HBO), Sony Pictures Television's Zack Van Amburg and AMC's Joel Stillerman. The company's complicated ownership structure may be an obstacle; as the search goes into its fifth month, one agent stresses, "Networks that report to a board are hard to build."

Hulu's plan to scale up comes as it sets its sights on a new target: capturing the elusive cord-cutter through a new live TV service, a bundle of broadcast and cable channels delivered online. "The success of Netflix has always been its singular focus on being an ad-free, on-demand video service," says BTIG media analyst Rich Greenfield. "Hulu is broadening out. Anything that distracts [it] from having the best on-demand content is a negative. But if the move into linear gives them more cash flow to pursue great on-demand content, it'll be an asset."

Greenfield believes Hulu losses exceeded $530 million in 2016 (up from $318 million in 2015) and that the company could easily top $800 million in red ink this year with the launch of Hulu live.

That service, expected in May, is positioned as a low-cost skinny bundle like those from Dish, DirecTV, Sony and YouTube. If it works, it will offer an experience untethered to a cable connection.

Still, the majority of Americans continue to subscribe to cable, and Hulu has been seen mostly as an add-on service rather than a replacement.

Says Pivotal Research analyst Brian Wieser, "It's a limited market [of cord-cutters, 8 percent of the U.S. population] that a lot of companies are chasing."

This story first appeared in the April 26 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

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