Why Does Netflix Rarely Stream New Ongoing TV Shows Compared to Hulu?

Streaming giants Netflix and Hulu have rapidly transformed the television landscape with their vast libraries of original and licensed content. However, one striking difference between the two platforms remains: Netflix rarely, if ever, streams new ongoing TV shows, unlike Hulu in the United States. This article delves into the reasons behind this difference, explores the business models of both companies, and provides insights into their strategies and plans.

The Business Models of Netflix and Hulu

Netflix's All-You-Can-Stream Model

Netflix operates on an all-you-can-stream model, meaning customers can enjoy an unlimited number of shows and movies for a fixed monthly subscription fee. This business model necessitates careful content licensing and budgeting. Netflix licenses content for a set period, typically ranging from one to three years, at a fixed price. To maintain profitability, Netflix focuses on high-demand and high-quality content, including its original series that often have significant production costs. The majority of the content on Netflix is syndicated and independent, which has lower licensing fees compared to new content and major Hollywood blockbusters.

Hulu's Royalty-Based Licensing Model

Hulu, on the other hand, operates on a royalty-based licensing model, where it pays content producers a minimum guarantee plus a royalty per viewing. This model allows Hulu to license more expensive and high-end TV shows from established studios and networks. Additionally, Hulu is owned by four major content companies, which simplifies and lowers the cost of licensing titles from their catalogs. This combination of flexible pricing and strong content partnerships enables Hulu to offer a broader range of new and ongoing shows.

Historical Business Plans and Strategies

The historical business plans of Netflix and Hulu played a significant role in shaping their current content strategies.

Netflix's Transition to Streaming

Netflix's initial business plan was focused on transitioning from a DVD rental service to a streaming delivery platform. This shift required a robust and diverse content library to attract and retain subscribers. Investing in original series quickly became a key part of this strategy, allowing Netflix to build a loyal following and differentiate itself from traditional cable and on-demand services.

Hulu as a VOD Add-On

Unlike Netflix, Hulu was initially positioned as a value-added service, offering a Virtual Video On Demand (VOD) solution for studio content. Hulu's business plan was to provide an additional service avenue for studios, allowing them to maintain their own networks while experimenting with ad-supported streaming. This strategy helped Hulu to establish a strong relationship with content production companies and make it easier for them to license titles from their catalogs.

Both platforms have since evolved, but the original foundations continue to influence their current strategies. Netflix's focus remains on original content and subscriber engagement, while Hulu continues to offer a mix of studio content and its own original series.

Current Strategic Alignment and Revenue Maximization

Maximizing Revenue through Multiple Channels

To maximize revenue, both platforms have developed multi-channel approaches to content distribution. For Netflix, this involves not only streaming but also selling episode packs, DVDs, and even selling off seasons to other streaming and traditional networks. This strategy serves multiple purposes: it provides additional revenue streams, supports marketing efforts, and keeps content relevant for as long as possible.

Hulu's Growing Ad-Supported Offering

While still licensing content, Hulu is also expanding its ad-supported programming, which is a strong revenue stream. This diversification not only helps in reducing the dependency on a single licensing model but also allows Hulu to offer a more comprehensive viewing experience.

The Future of Content Streaming

Both Netflix and Hulu are adapting to the evolving television landscape. Netflix continues to invest heavily in quality original content, while Hulu is looking to grow its ad-supported offerings and expand its original series. The future will likely see a continued shift towards more diverse content strategies, with companies exploring different business models to meet the changing needs of viewers.

Conclusion

The reason why Netflix rarely streams new ongoing TV shows compared to Hulu is rooted in their different business models and historical strategies. While Netflix prioritizes high-quality original content and robust licensing of independent and syndicated shows, Hulu's royalty-based model and studio partnerships allow for a broader range of new and ongoing television shows. Understanding these differences is crucial for appreciating the unique positions that both companies hold in the streaming landscape.

Keywords

Netflix, Hulu, streaming, content licensing, business model