Not so long ago, would-be cord-cutters faced a tough choice: There was no streaming alternative to cable or satellite. It was the pricey bundle with a long-term contract or nothing at all.

But the streaming revolution was approaching, and satellite provider DISH Network (DISH) chose to hasten it rather than hunker down and fight it. DISH debuted something new in 2015: Sling TV, a "skinny bundle" live TV streaming service that offered a slimmed-down and streaming version of a cable or satellite bundle. Sling TV was soon joined by Sony's (SONY -0.40%) PlayStation Vue and other competitors, but it never ceded its head start on subscribers -- until now.

With an impressive first quarter, Walt Disney's (DIS -1.08%) "Hulu + Live TV" has finally toppled Sling TV from the top of the subscriber-count pile. According to Disney, Hulu + Live TV now has 3.2 million paid subscribers.

A man watching TV with a remote in hand

Image source: Getty Images.

Here comes Hulu

Hulu + Live TV launched in 2017 as "Hulu with Live TV," but the Hulu brand was well established in the larger streaming world for years before that. When it debuted in 2008, Hulu was Netflix's (NFLX -1.51%) first real competitor. It was a collaborative effort between media companies that had streaming content to offer (presaging our current era, in which content competitors are rushing to become streaming companies), and it offered ad-supported streaming with an emphasis on new content (Hulu has long offered recently aired episodes of network shows that are in the midst of new seasons).

When Hulu added a live TV multichannel offering in 2017, it joined what was then a relatively crowded space. Sling TV had debuted in 2015, and PlayStation Vue had been hot on its trail since later that same year. AT&T's (T -0.16%) DIRECTV Now (now called AT&T TV NOW) launched in 2016, and tech giant Alphabet's (GOOG 0.10%) (GOOGL -0.02%) YouTube TV showed up in limited markets in early 2017. Soccer service fuboTV, which had launched in 2015, pivoted toward a more general audience in 2017.

A triumph in a competitive marketplace

Sling TV was the top dog when Hulu + Live TV entered the live TV streaming market in 2017, but not everyone believed that DISH's skinny bundle could hold the throne. AT&T's service was the hard-charging newcomer that most analysts figured would pass Sling TV within a quarter or two.

That didn't pan out: AT&T's skinny bundle weathered a stunning subscriber collapse that exposed its overreliance on promotional accounts. This included, according to a recent lawsuit, some questionable ones that customers may not even have been aware of.

It hasn't just been AT&T that has suffered. The skinny-bundle gang has had it rough. All of these services are understood to operate at break-even levels or (more likely) at a loss. All (including Hulu) have raised prices significantly over the years. Some (including Sling TV) have rolled back their use of free trial offers. PlayStation Vue recently threw in the towel entirely.

The tough skinny-bundle market has slowed down Sling TV's growth. But Hulu has kept charging forward. The weak state of skinny bundles in general makes Hulu's recent growth even more impressive. Hulu benefits, no doubt, from the deep pockets and marketing budget of its parent corporation -- Disney recently took full operational control.

The state of the skinny-bundle market

As things stand now, Hulu sits on top of the skinny-bundle market with its 3.2 million subscribers. DISH's Sling TV is now almost certainly in second place; barring a stunning reveal from DISH, Sling TV's next announced subscriber count should place it behind Hulu's new figure while keeping it ahead of YouTube TV. For its part, YouTube TV has passed the 2 million mark and should have third place on lock.

The numbers in play are still relatively small. Hulu's 3.2 million is an impressive number for a skinny bundle, but it still makes up just barely more than 10% of Hulu's overall subscriber base of 30.4 million (the difference comprises Hulu's on-demand subscribers). Disney+, launched years after Hulu + Live TV, already has 26.5 million subscribers. Even ESPN+'s 6.6 million subscribers are more numerous than Hulu + Live TV's crowd.

The live TV streaming market is still a small one, and there's no real guarantee that it will grow much more -- other alternatives, such as direct-to-consumer efforts from individual channels, could still beat out multichannel streaming as the direction of live TV's future. We do know one thing for sure, though: Whatever the worth of this little kingdom, it's Hulu's to rule. If Hulu can keep its growth rate up, multichannel services may be the way of the future after all.