Why NBCU Is Moving Hits to Hulu: "They Don't Feel They Need Netflix"
The network's newly inked SVOD deal with the streamer will see '30 Rock' move to a new home, though one analyst notes, "The real determining factor in who wins comes down to original content."
In a landscape where networks such as CBS, HBO and Showtime are hoarding their libraries to launch their own over-the-top services, NBCUniversal seems to be taking the opposite approach.
The Comcast-owned company has been steadily moving its shows to Hulu, inking a massive SVOD deal Sept. 27 to transplant 30 Rock from its longtime home at Netflix. The pact comes a week after Hulu became the exclusive streaming destination of the original eight seasons of Will & Grace, and four months after the two companies struck a record-breaking deal in May for last season's breakout drama This Is Us (which is produced by 20th Century Fox TV).
As part of the latest agreement, Hulu also struck non-exclusive distribution deals to pick up NBC's Parenthood; competition series Face Off, from NBCU-owned cable network Syfy; U.K. reality show Made in Chelsea; and Paul Reiser's new comedy There's … Johnny, which was originally set to premiere Aug. 24 on Seeso, the NBCU-owned comedy streaming platform that the company announced Aug. 9 would shutter by the end of the year. Johnny's debut on Hulu keeps it somewhat in the family, given that NBCU owns a 30 percent stake in the streamer alongside Disney-ABC Television Group and Fox Entertainment Group as well as Turner, which has a 10 percent stake (however, unlike Disney-ABC and Fox, NBCU is a silent partner and does not have a seat on Hulu's board).
"The [Sept. 27] deal makes sense for NBCUniversal given its equity stake in Hulu and its recent decision to pull the plug on its own SVOD service," eMarketer principal analyst Paul Verna tells THR. "It makes sense also for Hulu because it's still playing catchup to Netflix and Amazon when it comes to market share."
But why shift the libraries now, when Hulu has been around for a decade? "The streaming ecosystem is well enough established that networks don't feel they need Netflix to the extent they used to, so more of them are venturing off on their own," says Verna. "The dynamic is similar to the tensions between music labels and Apple over the latter's iTunes store years ago, but TV and film content owners now have more alternatives than their music counterparts did."
Hulu also is riding a high from beating Netflix and Amazon to become the first streamer to win an Emmy for best drama series, for The Handmaid's Tale. The Margaret Atwood adaptation, along with the launch of an HBO add-on and the addition of 7,500 episodes from HGTV, A&E, Fox and other licensing partners, boosted Hulu's average daily subscriptions 98 percent since March. "Our goal is for Hulu to be home to your favorite show, whether it's still on the air now or one you watched growing up," says Hulu vp content acquisitions Lisa Holme. But Verna counters that the company will have to come up with more hits to accompany Handmaid's Tale if it truly wants to pull closer to the market leaders: "Deals for exclusive content, such as the one between NBC and Hulu, increase the competitive pressure, but the real determining factor in who wins comes down to original content, not licenses for what amount to reruns."
Oct. 4, 1:52 p.m. Corrected to reflect that Parenthood will remain available on Netflix.
Oct. 4, 4:44 p.m. Updated to edit quote about Hulu's market standing.
This story first appeared in the Oct. 4 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.