Time Warner Clings To The Past, Wants To Eliminate Hulu’s Next-Day Streaming

In the world of streaming services Hulu is unique. While Amazon and Netflix stream either full seasons of TV shows well after they air or unload a full season of TV all at once, Hulu offers next-day streaming. If you can’t watch your favorite shows whenever they air, and you don’t want to deal with the terrible UI of most DVRs, you just pop the service on and catch up. It’s easy and simple. The best part is that you don’t need a cable or satellite subscription, you can just sign up for their service alone and watch.

However, the Wall Street Journal is reporting that if Time Warner gets their way, they’re going to eliminate Hulu’s greatest asset. The company is looking to purchase 25 percent of Hulu, and during negotiations with Hulu’s current owners (Walt Disney, 21st Century Fox and Comcast), Time Warner has said they eventually want to eliminate next-day streaming from the service.

Time Warner believes that the presence of full, current seasons on Hulu — or anywhere else outside the bounds of pay-TV — is harmful to its owners because it contributes to people dropping their pay-TV subscriptions, or “cutting the cord.”

This is a question that Hulu’s current owners have grappled with, delaying renewing licensing deals for current seasons as they ponder how to forge forward. Do they try to prop up Hulu to compete with Netflix? Do they invest in their own streaming services like CBS All Access? Do they tie their current services, like Fox Now and Watch ABC, to cable and satellite subscriptions until they absolutely have to offer their product to cord cutters? And what does that mean for their investment in Hulu?

In recent months, we’ve seen Hulu invest in alternatives. They have the entire Criterion Collection, giving it a large collection of classic movies to watch. They’ve invested in original programming like Casual and the upcoming Stephen King adaptation 11.22.63. They’ve struck movie deals that gets stuff like The Hunger Games on their service, and they’ve roped in the ability to subscribe to Showtime on Hulu. All these changes have helped Hulu go from 6 million users to 10 million users in a year. Whatever Hulu is doing, it’s working. The service is on the up, and the core of its identity is next-day streaming.

Most of these changes are being considered based on reality. These companies seem to understand that the future involves cord cutting, customers having the ability to not subscribe to cable or satellite bundles but instead to subscribe to a couple services like Netflix, Hulu and HBO Now.

Time Warner isn’t one of these companies.

Their goal, according to the Wall Street Journal, is to “reshape the subscription online video marketplace to support pay television.” Time Warner is desperately clinging to the past, hoping they can stuff the genie back into the lamp. Most of this has to do with Time Warner being under extreme pressure from investors to make more money. In fact, there’s speculation that Time Warner could just sell off many of its businesses (TV, movies, comics, whatever) to another company, like 21st Century Fox. This is a company that’s trying to navigate its way through crisis, and that means trying to grab onto whatever branches they can as they float through the turbulent river that is media in 2016.

What they don’t understand is that it’s too late. Audiences are already conditioned to this. They want their entertainment when they want it, they’re tired of cable and satellite subscriptions. There’s an entire generation of kids who are growing up with on-demand, untethered content on YouTube and Snapchat. They want to subscribe to what they want to subscribe to, not being forced to take on hundreds of extra channels they’ll never, ever watch. Most importantly, they want to easily get specific content. If that ease isn’t there, they are going to turn to piracy.

Cable and satellite bundles still make a lot of money, far more than the digital alternatives and subscription services like HBO Now have the potential to currently. ESPN is certainly feeling the crunch, losing billions of dollars and millions of subscribers each year as people start to reject these TV bundles in favor of the Internet and over-the-air services.

Part of the problem with Time Warner is that their two biggest properties, HBO and CNN, can go off and do their own thing. Both of those channels could split off and gain millions of subscribers from cord cutters at the right price. Their other channels, like TNT and TBS, can’t. They benefit from being bundled into existing cable and satellite subscriptions, and there’s no way TNT and TBS subscription services get enough revenue to keep things going (ESPN would have to scale back their services if they went full streaming, so imagine how screwed everyone else is). The way to save those channels isn’t to warp the world into saving them, but to improve them so that people do think they’re essential. All you have to do is look at what Disney is trying to do with ABC Family, now Freeform, or how Syfy and USA are investing in great new content to make themselves more valuable to viewers.

The future of TV is very much up in the air. It’s going to be hard and it’s going to hurt, but running into the closet and plugging your ears isn’t going to do anything but hurt you further, Time Warner. They’re going to have to make painful decisions, choosing to adapt or choosing to die. Right now, they’re leaning on dying. [WSJ]