Insights

NBCU takes a bite out of Hulu

16 March, 2022

NBCUniversal recently announced that it will end its content-sharing arrangement with Hulu this fall, pulling next-day access to some of its most popular series and hosting those episodes exclusively on Peacock instead. The move could deal a blow to Hulu which has built up a strong content offering using next day-episodes, like Saturday Night Live.

NBCUniversal’s decision to remove next-day streaming for some of its most in-demand series seems inevitable in hindsight, but it also leads to questions about what a further pullback from Hulu to build up its Peacock streaming service could look like in the years to come.

When considering the demand for all shows available on its platform, Hulu is the leader in the US. It boasted a 20% share of demand across all content available on SVODs in the US last quarter. The platform’s deep library of content means Hulu is a consistent leader in this measure. Its demand share is in no small part boosted by the high demand for content it licenses from NBCUniversal.

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More specifically, in Q4 2021 (Hulu’s Q1 2022) shows from NBCUniversal accounted for 16.2% of demand for all series available on Hulu. As a point of comparison the demand for NBCU shows on Hulu was greater than the combined demand for Hulu originals and FX series on the platform. As NBCUniversal plans to end a core aspect of its content sharing agreement with Hulu, this slice of content on Hulu’s platform is at risk. For example, of the shows Hulu will lose the next-day rights to, Saturday Night Live is the crown jewel. The sketch comedy series is regularly among the most in-demand shows in the US. Its cultural commentary and guest stars make the timeliness of having episodes on-platform the next day all the more valuable. Gaining the exclusive rights to this is a major win for NBCU’s Peacock.

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NBCU’s move to reclaim its content is not a surprise and, in fact, Hulu has taken proactive actions to mitigate the impacts of this. We’ve measured an increase in demand for Hulu originals over the past few months as Hulu has premiered a number of popular originals that have been among the most in-demand premieres of the past year. Shows like Only Murders in the Building and more recently Pam & Tommy are helping bolster Hulu’s arsenal of original content. Highly in-demand original series like these will help the platform guard against any future losses of licensed content. Buying directly from Disney-owned studios will also help Hulu ensure the platform can continue owning any hits the company produces. Hulu originals help the platform define its purpose for subscribers as Disney juggles two platforms (Hulu and Disney+) and tries to show the distinct and complementary value of both.

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