M+E Connections

The importance of subscription video on-demand (SVOD) services was a common theme during the latest earnings calls of AMC Networks, 21st Century Fox and Viacom. The significance of Hulu, in particular, loomed large on the AMC and Fox calls.

The earnings calls followed Time Warner’s announcement that it was taking a 10% equity stake in the online streaming video service and would be providing content from all its TV networks to Hulu’s live-streaming/virtual multichannel video programming distributor (MVPD) service that is scheduled to launch early next year.

Fox

Hulu now has more than 11 million paying subscribers and “we are confident” Time Warner’s brands “will play an important role in Hulu’s ongoing success,” Fox executive chairman Lachlan Murdoch said Aug. 3 on his company’s earnings call for the fourth quarter ended June 30.

“Across all our businesses, we are intensely focused on capturing the valuable opportunities that new technologies and emerging mediums present us. And these opportunities are significant. Downstream innovation has meaningfully increased both choice and consumption for consumers,” he said.

Dish’s Sling TV, Sony’s PlayStation Vue and Hulu’s coming virtual MVPD service all “understand and value the emergence of the core bundle that our brands underpin,” he went on to say, adding: “These and other emerging platforms will aggregate the best channels at reduced cost.”

Fox expects “more partners, more content companies, more programmers and brands” will be represented on the new Hulu service than what has been announced so far, Fox CEO James Murdoch said. “Hulu is in discussions with a number of those potential providers and suppliers currently. And as those come to completion and we are closer to a launch of the service, I know Hulu will be communicating about that,” he said without naming any potential new partners.

“There are no discussions currently about additional equity investment,” he said, adding: “We think we’ve got a great set of partners in this business and we’re very excited about it. So I think over the next number of months as we … complete some of the supply agreements, you’ll see more detail around the content offering and the full breadth of it.”

The CEO went on to say that with the “rebundling” that’s being seen in the TV sector, there is “significant demand for great television; there’s significant demand for a great customer experience, and we want to be able to deliver it at the lowest price that we can.”

Hulu can’t just offer every channel — it must instead “focus on what’s the programming that really, really matters and what’s going to drive consumption and what are people going to love,” he said. Although there will be a “core bundle ,” he added that was “not to say that premium offerings won’t be there” also. He pointed out that Hulu has been a “very successful seller of Showtime as a premium add-on to its SVOD product today,” and told investors “we would expect agreements like that to continue to be announced as well.” He also expressed confidence that the new Hulu service will be able to succeed without CBS being onboard.

AMC Networks

AMC Networks is open to being part of Hulu’s coming virtual MVPD service, according to CEO Joshua Sapan. AMC is already on Sling TV and PlayStation Vue, so “we do think, in general, that being able to access our brand and contents on the reconfigured platforms that come from conventional and less conventional aggregators and retailers is a good thing,” he said Aug. 4 on his company’s earnings call for the second quarter ended June 30.

AMC already has an SVOD relationship with Hulu, so “we enjoy proximity and ongoing commerce with them, and I think it’s been a fluid and very healthy and happy relationship,” he said, adding: “We’re in regular conversation with them.” But Hulu is still formulating its plans for the new service, he said, declining to comment on any talks that AMC has had with Hulu specifically about the new service. “We’re close to the company. We believe in and support what they’re doing. And we look forward to a future with them if it all works out,” he said.

Viacom

Viacom was unable to complete an unspecified SVOD deal as expected in the third quarter ended June 30, CEO Philippe Dauman said on the company’s earnings call Aug. 4. “We’ll see what happens in this quarter,” he said, declining to get into specifics about the deal in question out of concern that it may hurt the discussions Viacom “may be having.”

But Dauman stressed that Viacom is “going to do the right deals in the right way.” He went on to explain that, “in any deal, we always look for the right terms.” There are “many players out there” in the SVOD space, including “big, so-called traditional distributors which are looking at non-traditional products” such as virtual MVPDs, and new distributors including Hulu that are looking at a virtual MVPD product also, he said.

“We just want to be thoughtful … and make sure that we maximize our overall value” and Viacom is “not going to be beholden to timing of a particular quarter to reach a correct long-term decision,” he said. But he added: “We are having fruitful discussions. We are pursuing those discussions, and they may very well be done in this quarter, and I hope they will.”