Market Insight

Turner sells exclusive SVoD rights to Hulu Plus

May 01, 2015  | Subscribers Only

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Hulu has gained exclusive subscription video-on-demand (SVoD) rights to Turner Broadcasting  content. Under the multi-year agreement, content from Cartoon Network, Adult Swim, TNT and TBS will arrive exclusively on Hulu starting 1 May.

The deal includes previous seasons of programming from Cartoon Network (stream able ad-free through Hulu Kids) and Adults Swim. Content from TNT and TBS will include select previous, current and upcoming series. Hulu also locked in exclusive SVoD rights to certain future series yet to launch from all four networks.

Hulu has been working hard to acquire more exclusive content to its site, and in December 2014, it signed a multi-year pact with FX Networks that included exclusive SVoD rights. In April 2014, Hulu reported over six million Hulu Plus subscribers and is counting on exclusive content agreements to lure the ever growing cord-never households, where SVoD options are plentiful and increasing.

Other notable programming partners from Hulu include:

  • Disney
  • NBCUniversal
  • Viacom
  • Fox
  • Univision
  • A+E Networks
  • Scripps

Our analysis

The deal represents a ‘change of address’ for Turner content on US SVoD services. In early 2013 the Warner-owned network group did a deal with Netflix which included Cartoon Network and Adult Swim shows. As such it is best seen as an incremental development in the evolution of the SVOD market rather than a major step change in the broader TV landscape.

Nevertheless, this deal now establishes the US SVoD market as a three way race for content rights with Netflix, Amazon and Hulu increasingly using exclusive programming, both commissioned and acquired, to differentiate their services. In this context the role of kids programming has emerged as an important second front with Hulu’s deal with Turner joining Netflix’s deal with Disney and original shows from Dreamworks Animation; and Amazon’s deal with Viacom for exclusive rights to Dora the Explorer.

For rights holders, such as Turner, this increased level of competition it likely to be a near-term positive as it should help to bolster prices for the most popular shows as well as giving the rights holder another bite at the cherry if a show falls out of favour or terms cannot be agreed with an existing partner.

Importantly the deal does not give Hulu rights to all Cartoon Network or Adult Swim shows as Powerpuff Girls, George the Cowardly Dog, and The Boondocks all remain with Netflix. The latter company is keen to propagate the idea that it is increasingly using audience data to influence its content acquisition strategy. If that is the case in this instance then this ‘change of address’ would seem to be, in part about Netflix cherry picking the shows which are most important to its subscribers as a way of managing costs.

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