Hulu has yet to confirm a price point for its upcoming live streaming TV service but if it starts around $40 as has been reported, BTIG analyst Brandon Ross predicts the service will lose “real money.”

In a research note, Ross assumes that if CBS is included with Hulu’s virtual MVPD bundle, it could end up costing the SVOD service if it indeed runs with price around $40. Nevertheless, Ross says that Hulu’s success or failure with live TV could have wide implications for pay TV.

“The ramifications of success could have an effect that goes far beyond just Hulu's partners, from MVPDs to cable networks to Netflix. A failed Hulu virtual MVPD could dispel the idea of widespread competition for incumbent bundles from virtual bundled competitors,” wrote Ross in a research note. “We are skeptical that the Hulu bundle will meaningfully impact the MVPD landscape from a subscriber standpoint. We simply wonder whether the price/value will be strong enough to attract customers at ~$40, with much less content than the current larger bundles…”

Beyond the ramifications surrounding pricing, Ross also predicts that, given Hulu’s ownership including ABC, Fox and NBC, that the live TV service will likely be sports heavy.

Early reports on Hulu customer surveys included RSNs from Fox and Comcast as potentially inclusions in programming packages. But, as Ross points out, the suggest packages excluded Madison Square Garden Networks (MSGN), a New York area network that carries games from the New York Knicks and the New York Rangers. Although Ross says that the reported surveys likely don’t represent the final, full programming packages for Hulu’s service, MSGN investors are nevertheless concerned.

“We believe it would likely be in Hulu’s best interest to include MSGN in its offering. It seems clear the Hulu vMVPD will be sports heavy, given the network ownership and sports exposure of Hulu's owners,” wrote Ross. “We don’t believe that MSGN management knows exactly where they stand with Hulu, however, would welcome any color on current negotiations with virtual MVPDs.”

Ross also wonders whether MSGN management even wants to be in the Hulu bundle, worrying that participation in virtual MVPDs could be used against them in negotiations.

“For instance, Altice could theoretically tell those that want MSGN to switch their video provider to Hulu, while staying on Altice for broadband. We do not believe this would be an ideal approach for either party, but it is possible,” Ross wrote.

Of course, it’s difficult to predict if any of these scenarios will come true until Hulu actually launches its service, which could happen later this year.

Unconfirmed reports say the service basic package will start at $35 and will allow streaming to only one in-home device or mobile device. A $50 option allows for streaming to multiple devices.

Both plans will include 20 hours of DVR storage and reportedly include either live or on-demand access to ABC, NBC, FOX and CBS – along with channels including AMC, ESPN, TBS, TNT and USA.

Related articles:

Hulu's live TV service reportedly will start at $35/month, more than both Sling TV and PlayStation Vue

Charter pursuing Netflix, Hulu integration