A+E Is In, Viacom Out in Hulu's New Live Online TV Service

(Bloomberg) -- Hulu LLC, the video-streaming service, will carry six cable channels from A+E Networks including the History network in its upcoming live TV package, and has decided not to offer networks from Viacom Inc.

The accord gives Los Angeles-based Hulu a wealth of unscripted live and on-demand programming from the millennial-oriented Viceland to the more grownup fare on A&E Network and Lifetime, according to the companies. The online service was unable to come to terms with Viacom, the owner of Comedy Central and Nickelodeon.

A+E and Viacom are jockeying for spots in new online TV services to stem subscriber losses as more consumers watch TV shows and movies on the web instead of paying for cable. The History Channel has lost almost 8 million subscribers since the start of 2013, while Viacom’s Comedy Central has shed nearly 9 million, according to Nielsen data and Bloomberg Intelligence. The companies earn a monthly fee for each subscriber, so the losses hurt.

Viacom is “engaged in ongoing conversations with a spectrum of new, emerging digital distributors as we execute against our recently announced strategy,” the company said in a statement. The company does have a distribution deal with live-streaming TV service DirecTV Now and has one network on the basic package of another, Sling TV. Viacom, which also owns MTV, has been excluded from two other services, PlayStation Vue and YouTube TV.

The New York-based company’s shares declined further after Bloomberg’s report, falling as much as 2.1 percent to $43.50.

Adding A+E will let Hulu subscribers watch scripted shows such as History’s “Vikings” and reality programming like “Project Runway” as they’re airing on TV instead of waiting until later. “Having our top six networks available on their core package speaks to the power of our entertainment portfolio in reaching men, women, adults and millennials,” A+E Chief Executive Officer Nancy Dubuc said in a statement.

Hulu, owned by four of the world’s largest media companies, will introduce a service with more than 40 live channels for less than $40 a month within the next couple of months, according to the company. The package will include its existing on-demand service, which offers reruns of popular shows like “This Is Us” and “Blackish,” as well as original programming like “The Path” and “Casual.”

With the service, Hulu will be competing with AT&T Inc.’s DirecTV Now, Dish Network Corp.’s Sling TV and Sony Corp.’s PlayStation Vue in offering a smaller, low-cost bundle of channels. YouTube, owned by Google, expects to be out with its service in the next few months.

Hulu is combining the on-demand experience so many customers like on Netflix Inc. and the current version of Hulu with the live sports people watch on TV -- without the cost or clutter of a traditional pay-TV package. Hulu’s live service will include major broadcast networks, sports networks like ESPN and kids’ programming. To keep costs down, it will exclude many cable channels that are fixtures of most pay-TV packages.

Walt Disney Co., Comcast Corp. and 21st Century Fox Inc., three of Hulu’s four owners, have secured spots in almost every package thanks to the popularity of their main broadcast networks -- ABC, NBC and Fox. ABC and Fox also will be included in Hulu’s service, as will CBS Corp.’s over-the-air network. Comcast and the online service are still negotiating. Time Warner Inc., Hulu’s fourth owner, also will be part of the service.

Companies that only own cable networks have had a harder time elbowing their way in. A+E, co-owned by Disney and Hearst Corp., has a deal with Dish’s Sling TV, the online package with the most subscribers, as well as DirecTV Now, but isn’t part of Sony’s PlayStation Vue or YouTube’s service. 

Viacom Chief Executive Officer Bob Bakish has stressed the need to rehabilitate the company’s relationships with its traditional distributors, and recently promoted a veteran executive to do so. Viacom has already taken one step in that direction -- removing its programming from Amazon and Hulu’s on-demand services, which had dozens of shows and lured viewers away from conventional TV services.

Three other media companies -- AMC Networks Inc., Scripps Networks Interactive Inc. and Discovery Communications Inc. -- are all still negotiating with Hulu, though the addition of A+E could make their inclusion a tougher hurdle.

To contact the reporter on this story: Lucas Shaw in Los Angeles at lshaw31@bloomberg.net.

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Paul Barbagallo