Infamously, yet also half secretly, one of Hilly and Hannah's videos before the formation of The Hillywood Show was based on The Lord of the Rings. So it's no surprise that they would make a parody for The Hobbit, too. The surprise is just that filming is already over--usually they like to watch a movie first. But the official announcement, which you can see here, identifies the project they have been working on as "The Hobbit: An Unexpected Parody."
Since they have had to work with trailers and other material from the movie that has been released already, I'm picturing this video as focusing on one scene, possibly the scene when the dwarves arrive at Bag End and explain their quest. If that's the case, wow, that's one detailed set to replicate and tons of detailed costumes to put together. And what characters will they be playing? Will Hilly be Bilbo? Will they introduce other characters? How is it going to be structured?
I'm very excited and also very curious; this has potential to be one of their best videos and also one of the videos that widens out their audience.