Hulu is looking to place itself in competition with cable operators by developing a subscription service that would stream the feeds of broadcast and cable TV channels, according to The Wall Street Journal.
Hulu is closing in on licensing agreements with companies like Disney (DIS), 21st Century Fox (FOXA) and Comcast (CMCSA), all of which are co-owners of Hulu. Hulu is expected to launch the service by first quarter 2017 with offerings that could include channels like ABC, ESPN, Disney, Fox, Fox News, FX and Fox's sports channels, according to the Journal.
The move comes amid shifting cable-industry tectonics as consumers are increasingly taking advantage of cord-cutting opportunities that allow them to keep only the cable channels they want while cutting the ones they don't.
Last year in the U.S., 400,000 people ended their cable subscriptions altogether, according to Vice. More than one-third of American adults have Netflix (NFLX) subscriptions. However, there were still 99.4 million households in the country that pay for television as of the end of 2015, and the average adult watched three hours of television daily.
The average American TV viewer only watches about 17 of the approximately 200 cable channels available to them. At the same time, the average monthly price for a cable package rose 5% in 2015 to $100.
According to reports, Hulu's service would not require an existing Hulu subscription and would be priced monthly at around $40.
Hulu's reported expansion puts it in direct competition with Dish Network (DISH)-owned Sling as well as Netflix. Sling offers its "best of cable" package for $20 a month, half of what Hulu's package will reportedly cost. Sling currently has about 600,000 subscribers, according to TechCrunch, and many of those subscribers are there just for the ESPN package.
Hulu's current streaming package has about 10 million subscribers while Netflix has about 81.5 million subscribers.
Hulu joins Amazon (AMZN) -- a holding of the Growth Seeker portfolio that was upgraded Monday by TheStreet Ratings quant service -- in making a play for the cord-cutting streaming market share that is dominated by Netflix. Last month, Amazon announced it was offering its Amazon Prime Video subscription service as a stand-alone package for the first time. Amazon Prime Video is priced at $8.99 per month, more in line with Netflix's $9.99 per month.
Like other forms of media, cable television is in a state of flux and the major players are positioning themselves to reap the benefits from the next form the industry takes.