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Hulu Looks To Transition Plan That Could Change Content

August 20, 2012

Peter Suciu for redOrbit.com — Your Universe Online

TV junkies may like to watch the drama that unfolds on their favorite TV programs made available on the Hulu service, but the big drama could soon unfold in reality as Hulu could face a big shake up. According to a confidential memo that trade magazine Variety uncovered, it has the makings of a drama set in Hollywood with a number of influential players involved.

According to online reports, CEO Jason Kilar could leave the company, and its owners could look to take back control of their respective content.

To understand all this requires a bit of understanding in what could go down as one of the most innovative experiments in the delivery of TV content online. This is in no small part because Hulu is a joint venture of NBCUniversal, Fox, Disney and Provident Equity, and the service has been a godsend for those aforementioned TV junkies who either don´t have access to certain shows, or had the misfortune of missing their program when it aired.

Hulu was the service that could save the day if you missed say an episode of Fringe. However, if the memo is to be believed, things could be changing.

For one, beginning in September, the site would no longer have exclusivity for current-season content, which is not restricted to Hulu and content owner´s websites. This may sound like a good thing, as it could mean Fringe could be found in other places. Or it could open the door for Fox to only offer the episodes from previous seasons, charge for current episodes on sites like Amazon.com, or just make fans wait until the release of the DVD/Blu-ray.

The other thing that may change is how many ads online viewers will have to endure, but for those who opt for online viewing instead of paying for basic cable this could be a small price to pay.

But this isn´t just about TV shows obviously. Hulu offers content that ranges from NBC and Fox sitcoms, Disney programming and a lot of other content including Criterion Collection films. In total there are more than 380 content providers, and this includes distribution agreements with AOL, MSN and Yahoo. If the changes occur much of this Hulu exclusive content may suddenly become less exclusive. That´s good news for viewers and bad news for the company.

One reason for the shakeup is that content owners want to retake control over the licensing off their respective content. And this shakeup has actually been a long time in coming. While Hulu offers some content for free, more is available through subscription and the partners involved haven´t been able to agree on how much to charge.

So where does this leave Hulu? If the content providers decide to go their own ways, the service could still get non-exclusive content. It does have a rabid following of those TV junkies and has successfully created a niche for delivering content online from official sources.

One option is that Hulu could be sold, with such parties as Apple or Yahoo being suggested as possible buyers. The other possibility is an IPO, but an attempt to take the company public last year never materialized and the recent IPOs with Facebook and Zynga suggest that it might not be so welcome on the street.

So the most likely option now is that Hulu just stays on track doing what it is doing. It may have to compete against some of its former partiers, as well as other players such as Netflix and even YouTube. This would see Fox and NBC likely hold back content or delay it to give their own sites an edge.

As for Kilar, according to Variety he stands to make $100 million should he suddenly find himself squeezed out. While he might not consider this to be a happy ending, shouldn´t everyone consider such a windfall a fairytale ending!


Source: Peter Suciu for redOrbit.com – Your Universe Online



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