Thursday, May 4, 2017

Cordcutting: Hulu Live TV is available starting now for $39.99 a month with DVR service

Hulu is no longer just that place you go for next-day TV show replays. Starting right now, Hulu becomes its own live TV provider. You pay a monthly $39.99 bill, and for that money you get the “regular” Hulu service with over 3,500 TV and film titles and a live TV package of over 50 channels. There’s no cable box. Hulu’s live TV is available on Android, iOS, Apple TV, Chromecast, and Xbox One at launch, with support for Roku and Fire TV devices coming later this year. The company’s operating philosophy resembles those of competitors like Sling TV, PlayStation Vue, DirecTV Now, and YouTube TV. To Hulu, TV is meant to be mobile, TV should work around your lifestyle, and TV is supposed to be an app. Hulu has put a ton of work into building that app. Hopefully this guy doesn’t hate it.

When you open the new Hulu, it’ll ask about your favorite genres, your must-have shows, and your preferred networks. Millions of people already subscribe to the current service, so in many cases the company will already have plenty of data to pull picks from. But you can also choose to start fresh. Up to six profiles can be set up on each account, and parents can enable kid profiles that automatically limit available content to family-friendly selections.

The “new Hulu experience” (a top-to-bottom overhaul of the entire app) and live TV represent another, even bigger chance at reshaping how consumers think about television.

“You can’t talk about the next 10 years of TV and video experience without talking about live,” says Ben Smith, of Hulu Live TV. “Live TV isn’t going away. So for us it’s how do we make it best for the viewers of 2017, for the viewers of 2020, and the viewers of 2025?” Hulu isn’t alone in wanting to solve that question. Cable and satellite providers are trying to reverse subscriber losses by evolving their services beyond just a huge bundle of channels with a DVR into something more. These days, Comcast’s X1 platform lets you speak commands to its voice remote just as you would to Siri or Google Assistant on your smartphone.

Hulu’s parent companies are all media giants. ABC/Disney, 21st Century Fox, and Comcast each hold a 30 percent stake in the business; Time Warner owns 10 percent. Hulu will offer programming from all four in the live streaming package, so that covers CBS, NBC, Fox, TNT, TBS, and CNN. The company has also signed critical deals with Disney (including ABC and ESPN), Scripps (HGTV, Travel Channel, Food Network), and others. AMC is a glaring omission. Hulu TV users will have to get their Walking Dead and Better Call Saul elsewhere.

Despite its being owned by different megacorps with their own respective interests, Smith says that all parties are behind the new Hulu direction. “At a pure technology level, all of the major networks are highly invested in building out this kind of next-generation TV experience for everyone.” Even if Comcast, the parent with the most to lose, weren’t a fan, FCC restrictions around its purchase of NBCUniversal prevent the company from influencing Hulu’s business decisions until 2018.

Yet even with that support, the challenges that internet TV services like Sling TV, DirecTV Now, Vue, and Hulu face in maturing from nascent efforts into mainstream cable rivals are plentiful and daunting. People love what they’re used to, and all it takes to be dropped from a consumer’s consideration is failing to provide their favorite channel or show. Hulu is launching its live TV product without any Viacom networks, so it won’t offer Comedy Central, Nickelodeon, MTV, VH1, BET, CMT, and other channels.

At least the company can say it’s not alone in dealing with this programming hole. DirecTV Now and Sling TV have Viacom as part of their channel listings; Vue and YouTube TV don’t. Smith says that Hulu and Viacom were friendly partners for years, but still puts the current state of things bluntly: “We just couldn’t find the right deal that worked for both of us.”


How many channels are included and how much does it cost? Over 50 channels. $39.99 monthly. You can pay an extra $19.99 each month for more DVR storage, the ability to fast forward through commercials, and “unlimited screens” on your home Wi-Fi.

Okay sure. “Over 50.” But what are some good ones? A&E, ABC*, Cartoon Network, CBS*, CNBC, CNN, Disney Channel, E!, ESPN, Fox*, Fox News, FX, HGTV, History, MSNBC, National Geographic, NBC*, Syfy, TBS, TNT, USA
* = only in certain areas

Does it have sports? Several national sports networks are included, and Hulu also offers regional sports networks in “many” areas, such as YES in the New York region.

Does it have Viacom channels? No.

What devices does it work on? Android, Apple TV, Chromecast, iOS, Xbox One.
Fire TV and Roku support will arrive by the end of this year. “Sooner than later.”

How much DVR storage do I get? 50 hours in the base plan, or 200 hours with the Enhanced DVR add-on. Recordings are moved off on a first-in, first-out basis.

Is ad-free Hulu still a thing with this? What if I have it? Yes, you can still pay $4 extra every month to remove ads from many of Hulu’s on-demand streams. A lot of your DVR’d content will play back without any commercials, but not all shows on Hulu allow ad-free viewing.

Can I get HBO or Showtime for an extra fee? HBO no. Showtime yes ($8.99/month).

Hulu shares something else in common with its relatively young competitors: it will only offer live feeds of the big four broadcast networks (ABC, CBS, Fox, NBC) in select regions. Six at launch, to be more specific. That covers a lot of people in major cities, but leaves vast parts of the US with no way to watch The Voice or Modern Family or Empire or Designated Survivor live as they air. Instead, subscribers will get Hulu’s regular video-on-demand replays for those networks and live streams for everything else.

Your random small-town NBC or CBS affiliate isn’t always well-equipped for this whole internet streaming thing, it turns out. Hulu executives visited one market “where literally there’s a guy pressing a button for commercial breaks.” That convoluted affiliate structure and uneven technology balance means it’ll be a very long time before Hulu or another over-the-top service can live stream all four broadcasters nationwide.

Hulu and the big four have discussed offering a national feed in areas where affiliates aren’t participating, but Smith said there are no immediate plans to go that route. “What I told the network groups is I want to see what their channel offering is. Because if it’s just a bunch of crap, then it’ll be worse to have it — you know, paid programming all day long.”

And then there can be unforeseen crises, like when this year’s Golden Globes couldn’t be streamed with any of these apps. It was an embarrassing night for Sling TV, DirecTV Now, and Vue, and a frustration that zero cable viewers had to contend with. “It caught all of our attention,” says Smith of the Globes blackout and resulting social media backlash. “That agreement was signed eons ago before things like streaming were contemplated. So NBC had no grant-of-rights to air that in its original airing outside of NBC cable and satellite and their terrestrial OTA.”

Translation: ancient, poorly conceived contracts were to blame. But the reason never really matters much to customers — only that they couldn’t watch what they wanted to. “Now, everyone has been looking for these,” Smith adds. “We were on the phone [the following] Monday morning with Fox going ‘Alright, we need you guys to go through every event you have, every network special you air…’ and they were like ‘We’ve already got people on it.”

Hulu acknowledges that these random you’re not allowed to stream this moments might still occur on its own service. “I am sure we will see it at some point,” confesses Smith. But the company is poring over each agreement it signs to avoid ugly surprises.

Sports is another primary focus for the live TV product. You can select your favorite teams to have the service automatically follow them across channels and record games to your cloud DVR. Hulu will offer regional sports networks (RSNs) in “many” markets; YES is available in the New York area, for instance. But by now, sports fans should know that watching games isn’t always straightforward. “We have learned a lot about blackout rules. ESPN has taught us a lot about blackout rules,” Smith jokes; in a later interview, he tells me it’s “more complicated than the SATs.” Hulu, he vows, is “going to help customers through it.”

No one has dealt with that complexity more than Tian Lim, Hulu’s chief technology officer. “It’s crazy what the sports networks will make you do,” venting about the precise latitude and longitude coordinates that dictate markets which are to be included in a blackout. “No one had a standard way of declaring blackouts.“ So Hulu encouraged standardization — both for its own benefit and to ease things for everyone else in the space. “One set of RSNs might use an API, another might send you a spreadsheet, another might send you an email.” Those seem like less-than-ideal ways of telling a company they’re not allowed to stream a professional sports game. And those declarations are sometimes tied to stadium ticket sales and can come minutes before game time.

Lim says that his team (totaling around 200 developers) has put in a staggering amount of backend work alongside partners to bring order to things. This also applies to metadata for regular TV shows; depending on what kind of source feed Hulu is working with, figuring out the markers for when TV shows actually begin and end — fundamental to having a competent DVR — and pulling in accurate episode data isn’t always so simple. “There’s one two-parter Seinfeld episode that just throws off everybody. This whole metadata challenge has been crazy.”

He’s also the person responsible for ensuring that Hulu doesn’t run into the same reliability issues and streaming interruptions that competitors like DirecTV Now have at times encountered. Too many of those and you’re toast; the subscription gets cancelled, and your customer runs back to cable or their antenna or whatever they were using before. “If today you wanted to build your own digital MVPD, it would be relatively simple if you had no existing business,” he says. “But for us, to actually weave it into an existing subscriber base dramatically increased the complexity.”

“Part of what we tried to do is try to up the overall maturity of the industry so that the next people who do this will have a better product and we’ll compete on better and better products,” Lim says. “Ultimately it’s the content that matters, and if the presentation of the content isn’t great, then everybody loses.”

To avoid that shoddy presentation, Lim speaks of a massive grid of the content delivery networks and servers and encoders and data centers that are Hulu TV’s backbone. The company now runs a 24/7 customer service operation, as well. “You just get sympathy for DirecTV Now, because I know what pains they have to go through,” he says. Smooth performance is vital. Changing channels on Hulu needs to feel just as fast as with a cable remote. “We can’t have the thing buffer for eight seconds to change the channel,” says Smith. “That was a lot of my experience on Sling [TV], was that four seconds, five seconds.” Without rapid loading times, Smith concedes “we won’t have a credible channel flipping experience.” At launch, he’s happy with how most are performing.

Hulu opened the research labs within its headquarters in late 2015. The company often has multiple studies happening simultaneously to gather feedback outside its own bubble and see how participants react to changes in its various apps. There are overhead cameras, and the company has glasses capable of eye tracking to see if someone is looking around the screen hopelessly puzzled. “We think it’s awesome. Let’s get a reality check,” Strawbridge says of the motto that guides research. For the company’s big move into live TV, some members of the team went out to visit volunteers several states away. “We’re just gonna sit in their homes and watch them watch TV,” researcher Nicole Kuhn. Developers and designers can be stubborn when a regular person suggests that a particular design choice might not be so awesome. “Invariably, the first reaction is ‘It’s them, not the product.”

The core user interface that Hulu landed on breaks everything into five sections: Home, My Stuff, Browse, Search, and Account. Inside each are other tabs you can swipe between. The first thing you’ll see is the Lineup, which is basically your home portal. Recommendations are a mix of what’s airing live on TV right now and content from Hulu’s streaming vault. Next to the Lineup is “Keep Watching,” which I’d hope is self explanatory.

Beside that is “My Channels,” which is as close as Hulu ever really comes to giving you a conventional guide. You can swipe through what’s on currently — channel by channel — and while watching content, you can pull up what Hulu calls the FlipTray to see what’s coming up next and what’s on elsewhere. Hulu avoided a grid of channels, something rivals still offer, purposefully. “We’re gonna abstract out the kind of archaic channel infrastructure of TV, because it doesn’t exist in the digital world, but people do use those kinds of things for way-finding, so we’re just changing the relationship around.” “How do people think of their local ABC station? Is it ABC? Is it channel 7? Is it call sign? That’s one that frankly has ended up being a little bit of a mixed bag.” To make all this content gel together, Hulu employs what Smith calls SmartStart.

SmartStart will recommend where to begin with a given show based on the type of show that it is. If it's a primetime series you haven't streamed yet, Hulu will assume you'll want to start from the very beginning. But few people are going to suddenly dive into Keeping Up with the Kardashians or The Tonight Show from their original episodes, so that would be a fairly stupid recommendation. For those genres, Hulu recognizes that you'll probably want to watch something more recent, so it'll recommend either the latest episode or the beginning of the current season.

Hulu also picks up on your daily viewing habits and gradually improves what appears in the Lineup based on time of day or even the device you’re watching from. You probably watch different things on mobile than you would at home. If it works as promised, users can expect the service to establish “habitual behavior” after 30 days or so.

The $39.99-per-month TV subscription includes 50 hours of DVR storage, with Hulu automatically saving episodes of shows that you’ve added to My Stuff. There’s no such thing as “record only this episode” and you can’t just start recording a channel manually. Other internet TV services don’t do that, either. Saved shows will stay around indefinitely until you go over your allotted storage, says Smith. “It will save in perpetuity. You have 50 hours in the base package and 200 hours in the Enhanced DVR package, and they’ll roll off on a first-in, first-out basis.” What version of a show you’ll see when you hit play is... complicated. It depends on what Hulu decides is the “best asset” for your situation. If you pay an extra $4 monthly for ad-free Hulu, you’ll get that clean version for eligible shows. In other instances, the service will favor recordings as they originally aired on TV over on-demand.

See, one very annoying obstacle in the $39.99 base package is that you can’t seek through or fast forward commercials when watching live TV or recorded content. You can pause, but rewind and fast forward are only available once your program is back on. When you get to the next commercial break, you’re stuck with only the pause button again. Hulu can’t distinguish between ads and content on all networks, so you’re not restricted everywhere, but most of the big channels fall under this rule. I predict that more than a few prospective customers will be turned off by it.

If that’s you, Hulu is happy to sell you a $19.99 (monthly) “Enhanced Cloud DVR and Unlimited Screens” add-on, which ups your cloud recording time to 200 hours and does permit seeking through all content. With that factored in, the monthly subscription goes up to roughly $60. That’s a significant jump. Oddly, Hulu is also quietly offering a “Live TV Only” package with no on-demand content whatsoever for $38.99 — a savings of $1.

The “unlimited screens” part of the premium add-on allows up to 20 simultaneous connections from your home IP address. One would hope that’d be adequate for all the displays in your house. If you somehow exceed it, the app will prompt you to call the company and explain whatever unusual situation you’ve got going on. Fair warning: you can’t use Hulu TV for all the tenants in your apartment building or for all the TVs in a sports bar; those would violate the company’s terms. When away from home, you’re given two “anywhere” concurrent streams with the base plan or three with the premium add-on.

So this is what Hulu has to offer as it enters to compete against Sling TV, PlayStation Vue, YouTube, and to some extent big cable. It already has the benefit of stronger brand recognition than some of those — particularly Vue. Hulu’s pitch: you’ll get some (but not all) good channels, a decent serving of sports, a smart personalization engine, and an obsessed-over user experience. The batch of live TV channels you’re getting certainly aren’t unique to Hulu, and the company is facing some of the same early-days frustrations as its rivals. Those frustrations largely don’t exist for traditional cable customers. They get their Walking Dead and live, local CBS just fine. Still, Ben Smith still thinks all of these things together will be compelling for the large portion of US consumers still unaware that these internet TV services exist in the first place.

“If you’re in our space, if you’re in the media space, you’ve been watching Sony and Sling and DirecTV and YouTube for awhile now,” he says. “But if I walk out to Costco, the vast majority of people, I think, are going to give me blank stares.” Hulu believes there’s “a lot of the category to define,” and after more than 18 months of design work, backend preparations, and all that research, it’s ready to redefine itself to get there. The effort could falter for any number of reasons, but ideally the people behind that glass mirror will keep guiding Hulu towards improving things.

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