Hulu Reportedly Plans to Get Into Skinny Bundle Business With Fox, Disney

In Talks to Gain Rights to Channels Including ESPN for Live TV Package

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Hulu, the online video service owned by a trio of large media companies, plans to offer a live TV package featuring a mix of channels from its owners and their peers, according to people with knowledge of the matter.

Hulu is talking with 21st Century Fox and Walt Disney, two of its owners, about gaining rights to channels such as Fox and ESPN, said the people, who asked not to be identified discussing private negotiations. Hulu hasn't progressed as far with Comcast, its third owner and the largest cable operator in the U.S., the people said.

Created as a vehicle for its owners to offer films and TV shows on-demand over the Internet, Hulu is the latest company to jump into the so-called skinny bundle business. Media companies and pay-TV distributors are beginning to offer smaller packages of live channels as an alternative to costly cable and satellite service and to draw new viewers to their channels. Dish Network and Sony already sell their own versions.

Hulu plans to differentiate itself from those services with its reservoir of on-demand programming, one of the people said, as well as a user interface that would offer viewers a more personalized experience. The service said last year it had nine million subscribers.

By taking Hulu into live TV, Disney and Fox would be competing directly with distributors like AT&T and Charter Communications.

Without content deals in place, Hulu hasn't decided when this service will debut or what it will cost. The company is seeking to start as early as next year and will probably charge around $40 a month. The plans were reported Sunday by the Wall Street Journal. Disney's ABC network didn't immediately respond to a request for comment.

Hulu may discuss the service at a presentation in New York this week, when company executives unveil the service's upcoming slate of original programming and licensed series from other programmers. Hulu has increased its spending on its own shows in recent years to bring in new users, much like Netflix.

-- Bloomberg News

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