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“Devs” is one of several FX series to premiere directly on Hulu.
NEW NORMAL

Cable network FX had to fuse with Hulu to survive the streaming era

Adam Epstein
By Adam Epstein

Entertainment reporter

From our Obsession

The Third Age of TV

First came broadcast, then cable, now streaming.

Four months after FX began debuting some of its original series on Hulu rather than cable TV, the companies say the new arrangement is going swimmingly.

FX’s reach expanded by 130% after the “FX on Hulu” hub was launched in March, Hulu announced this month. Under the deal, in addition to a select group of FX originals now going straight to Hulu, most other new FX episodes are put on Hulu the day after they air on the US network. The hub also includes access to virtually the entire library of past FX shows, including The Shield and Justified.

Meanwhile, Hulu revealed half of its customers have engaged with the FX hub in one way or another. The US-based streaming service had about 32 million subscribers as of the second quarter.

As more Americans ditch their cable subscriptions, FX needed to find another path for growth. Then, Disney came along. The entertainment titan, which as of last year owns both FX and Hulu, decided to effectively incorporate the respected cable TV brand into Hulu in order to help it reach new audiences, while supplying Hulu with a new pipeline of quality content.

“Without launching FX on Hulu, we wouldn’t be able to grow our brand and take enough quality swings to remain relevant to consumers in the streaming era,” FX CEO John Landgraf told reporters at a Television Critics Association panel earlier this year.

Linear TV ratings are plummeting. Viewership on FX has dropped 30% over the last two years, according to media research firm MoffettNathanson. More than 16 million American homes have cut the cord since 2013. Another 10 million are projected to cancel their traditional TV subscriptions by 2023:

Cable TV won’t disappear overnight, but it’s clear the future of television consumption is on streaming. Landgraf recognizes that in order for the company to thrive in the next age of TV, it needs to reach new viewers.

“We hit a ceiling because basic cable can’t go beyond its own ceiling,” Landgraf said. “Even though we’re in 85 million homes, it’s not growing in terms of usage and expansion.”

So far, the early returns on FX’s branded Hulu content hub are promising. Viewers of the FX series A Christmas Carol were 17 years younger on Hulu than on FX, Variety reported. FX content has always been tied to the advertising market, but now Hulu provides the company an avenue to reach ad-free viewers while maintaining its brand—and without having to license content to a streaming service like Netflix.

The assimilation of FX into Hulu is a strategy other streaming platforms and cable networks could employ. WarnerMedia could debut new TNT series directly on its fledgling streaming service, HBO Max (WarnerMedia owns TNT). NBCUniversal, which owns the USA Network, might want some of the channel’s new shows to premiere on its upcoming streaming service, Peacock, instead. Most major cable TV networks have some corporate connection to either an existing streaming platform, or an upcoming one.

This would be somewhat ironic: Streaming, the very thing that is speeding up cable’s demise, may also be what saves networks in the long run. Many cable networks are actually scaling back programming (some have folded operations altogether), finding it difficult to compete with the deep-pocketed streaming companies. But by joining forces with the streamers, cable channels could receive the injection of cash they need to produce more content while accessing audiences that have eluded—or deserted—them.

“We’re unleashing an inherent potential that lies within the content and the brand that’s been restrained to some extent by the distribution method,” Landgraf told Vulture in March. “We need Hulu very, very much.”

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