Launching a streaming live television service has become the new version of launching a wearable: Even though no company has proven that the business model is viable, the assumption that it will be have caused a number of players to jump into the fray.

The latest apparent entrant, Hulu, has released some details about its plans to start offering a streaming-TV subscription bundle in early 2017 that will allow customers to view major broadcast and cable programs online.

In this segment from the Market Foolery podcast, Chris Hill, Jason Moser, and Taylor Muckerman explain how offerings like this exemplify the way the cable space is changing; what the price point Hulu has already set for the service will mean for consumers; why the bundle could be a significant threat to companies like Comcast (NASDAQ:CMCSA), Disney (NYSE:DIS), Verizon (NYSE:VZ), and more. 

A full transcript follows the video.

This podcast was recorded on May 2, 2016. 

Chris Hill: Hulu making some news today. Hulu, obviously, a private company, and known for being, among other things, a competitor to Netflix (NASDAQ:NFLX) when it comes to the video-on-demand type service. The Wall Street Journal reported that Hulu is developing an online TV bundle that will let subscribers stream major broadcast and cable channels. Hulu is owned by this odd conglomerate of huge players in the space -- Disney, Twenty-First Century Fox (NASDAQ:FOX) (NASDAQ:FOXA), Comcast.

So, on the one hand, Jason, you would think that, as part owners of Hulu, these businesses that have their own content would be very open to helping Hulu make this succeed. On the other hand, was it two years ago? Three years ago? It was about this time, I think, in 2013, that one of the big stories we were talking about was about how these major media companies were looking to sell Hulu. They were basically washing their hands and saying, "We're done with this, let's try and find a buyer." Obviously, that has changed.

Jason Moser: Yeah. I think, perhaps, in the past, maybe Hulu was viewed more as a competitor to Netflix. I think, when you look at this deal, the potential that this has, I don't think this is really anything about competing with Netflix as much as it's just a testament to the changes this space is witnessing right now. It's coming down to who needs the middleman.

For the longest time, you look at the value chain, and this has really all been about distribution. So, for the longest time, we've gotten our TV thanks to the cable providers, because cable was the only way to really get it. We had distribution for a long time via antenna on top of our house that changed to cable, and cable really held up a hand there. 

But, as the Internet continues to do, it has completely changed the game on so many fronts because it has opened up the distribution channels in a major way. I think this is a great idea. I think that we're already seeing big companies like Verizon taking note and trying to offer skinnier bundles in order to be able to keep customers. You're seeing that you can go without cable and have HBO, Hulu, Netflix, ala carte, and get a lot of what you want. I think it'll be very interesting to see at what point we get to where the cost benefits disappear, because for the longest time, it's been one of economics more than anything else. 

You could say that you could get Netflix and Hulu and HBO, and pay far less than you would for a cable subscription. And that's true. It makes a lot of sense. You're really getting what you want, and not having to deal with all that other stuff the cable company is charging you for that you don't really use. But at some point, the demand for the products that are out there that are taking advantage of this new distribution, the economics start to come a little bit closer together. And it'll be interesting to see when that is.

That said, I think this Hulu deal is particularly noteworthy because of the Disney relationship, the Fox relationship, the access to sports that both networks have. If I'm Comcast or Verizon, I'm taking note of this, because this is a big threat.

Hill: That's part of what I find so interesting about this -- Comcast is part of the ownership. Maybe they're being really prescient in terms of disrupting their own business model. But you're right, Hulu potentially has access to all of the content you just said; and yet, we don't know what's going to be in this bundle. They haven't shared that yet. They haven't, presumably, decided upon that. This is a service that's going to launch in early 2017. One thing that apparently has been decided on is the price, which is expected to be around $40 a month.

Moser: And that's right in line, I think people talked about, with the potential offering that Apple may or may not come up with at some point. I think that's a good round number. It offers that compelling price where you feel like, "Yes, that'll be cheaper than what I'm paying now."

Taylor Muckerman: But you still have to pay for your Internet. If you buy that by itself ...

Hill: It's also a lot more than you're going to pay for Netflix. It's a lot more than you're paying for HBO Go.

Moser: Absolutely. And further, to your point about the pipes, with Comcast having part ownership in Hulu, having a very big ownership in the pipes that go to your house, what becomes more valuable? The content, or the way people are getting that content? And that's going to be a question we see asked and answered, I think, in the coming five years.

Muckerman: They hold the keys to people's Internet. That's the ultimate thing right there. You have to have Internet to stream. We cut our cords late last fall, and it's just shocking, when you really boil it down to how much they're going to charge you just for Internet versus how much they charge for the entire package. It's over two-thirds.

Moser: I mean, supply and demand dictate this. It's plain to see. It's all about distribution, and the more people use the Internet, and demand more bandwidth, there is going to be a reason for those prices to go up, because the demand is there. And that's perfectly fine, there's no problem with that. That's how this works.

Again, I think it's neat to see how the distribution changes the space. I think those cost benefits are going to fade away as time goes on, because like it or not, everybody wants to get paid. And Comcast and Verizon aren't going anywhere, it's just a matter of where they stand in the value chain with this relationship.

Jason Moser owns shares of Apple and Walt Disney. Taylor Muckerman has no position in any stocks mentioned. Chris Hill owns shares of Walt Disney. The Motley Fool owns shares of and recommends Apple, Netflix, Verizon Communications, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.