Friday, April 27, 2012

Can Hulu Survive Its Owners?

For viewers seeking online sites to watch their favorite TV shows, Hulu has been a welcome addition.  Missed episodes or catching up on a series, Hulu can be a great site to visit.  But Hulu seems ripe for self implosion; why?, because it competes with itself.

Hulu is owned by broadcast and cable networks battling each other in the linear space.  To come together in the digital space seems only a recipe for disaster.  And one that looks to get even more dicey.  One of its four owners, the only one without a cable or broadcast network, Providence Equity, is looking to sell out its share to the remaining partners.  "The approximately $200 million payment would allow Providence Equity to double its investment. The firm contributed $100 million in 2007 to help founding companies NBCUniversal and News Corp. launch Hulu. Disney came aboard as a partner in 2009."

All the folks at the networks that started Hulu 5 years ago are gone.  Comcast's purchase of NBC required them to give up a management role and be a silent partner.  Can one really expect that those running Hulu today, Fox/News Corp. and ABC/Disney, really want to work together?  Last year, they tried to sell Hulu, but then changed their mind.  Hulu may be making money but at the expense of their deals with their cable distributors.  And while it may be better to take money in this new platform through Hulu, it is hard to imagine that they can mutually manage this partnership without a lot of arguing and disagreements as to strategy and execution of tactics.  Without a middleman like Providence Equity to referee those battles, one wonders post their withdrawal from the business whether the remaining partners can still work together.

Last point, if they can agree to come together, is it time to pursue CBS to join the Hulu team?  The big 4 broadcasters partnering to own the digital streaming landscape.  Not likely, but what if.

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