• by Wayne Friedman , May 2, 2016

Expanding more premium digital video options, Hulu is looking to start up a “skinny” over-the-top digital TV service.

Hulu, whose managing partners are Walt Disney and 21st Century Fox, will price a limited TV network package at $40, a service looking to compete with Dish Network’s Sling TV, as well as traditional pay TV packages. The move was first reported in The Wall Street Journal.

The new OTT service would offer live and on-demand programming and launch next year. Analysts say many TV companies are focusing on lower consumer cost TV package. The least expensive Sling TV network bundle, now one of the oldest “skinny” OTT services, can bought for $20 a month.

By contrast, traditional pay TV packages can easily cost consumers around $100 or more a month. 

Comcast Corp., owners of NBCUniversal and the largest U.S. cable operations, is another investor of Hulu. It also owns one-third of the company, as does Disney and Fox. But it does not have any management role in the direction of the company.

Todd Juenger, senior research analyst of Bernstein Research, anticipating this Hulu ‘skinny’ package, said there could be a number of problems.

He wrote recently: “Why would the MVPD's [multi-video programming distributors] agree to continue paying high and ever-increasing affiliate fees to networks that are actively and aggressively going around them?”

Juenger also said this could cause more ‘churn,’ consumers opting in and out of different OTT packages. Also that TV advertising revenue declines would continues -- mostly due to more on-demand, digital time shifted viewing.