• by David Goetzl  @dgoetzl, February 17, 2011

If Jeff Zucker and Peter Chernin were holed up today trying to get ahead of the online video boom, would they again gamble on Hulu? The safe bet is no. So much has changed since the handshake agreement between Zucker and Chernin led to Hulu's launch in 2007, that it's difficult to believe the two would do it again - at least with Hulu in its free, ad-supported form.

Economic models for Web streaming continue to puzzle, but the advent of "TV Everywhere"; the surge in retransmission-consent payments; and a transforming Netflix suggest Hulu's owners could make more money without the site and by pursuing other options.

The brilliant Zucker and Chernin didn't view it that way at the time -- understandably, they thought the opposite -- but what is becoming clear is Hulu had an element of defense in its launch. Zucker said as much last month, though he is a defender of the venture.

Zucker made his comments days before he left NBC Universal (NBCU) last month. Chernin had previously left News Corp. In fairness, as the wisdom of Hulu is subject to revisionist history, it bears mentioning that NBCU and News Corp. were able to persuade tech visionary Bob Iger to make Disney a partner in 2009.

Also, Hulu CEO Jason Kilar told The New York Times in August the site is profitable, though how much is unclear. That might have been available had Hulu gone ahead with plans for an IPO, but it backed away. Yet, it is becomingly increasingly clear -- or at least networks claim it -- that a content business cannot be supported simply by advertising. A signal that Hulu may be finding the same as it launched a pay service, Hulu Plus.

Evidence that Hulu has roots on defense can be traced to early 2006, when a version of the "Saturday Night Live" short "Lazy Sunday" appeared on YouTube and helped put that site on the map. NBC went ballistic, demanding the fledgling site take it down. There was piracy, theft, copyright violations, etc. YouTube agreed.

"You have to remember that when we formed Hulu, people were stealing our content and building businesses [with] piracy," Zucker said last month in Miami. "And [it] was an attempt to really deal with that, and I think we have successfully done that."

At the time of Hulu's launch, Zucker and Chernin found little risk in streaming NBC and Fox shows. The content was available free anyway, right? Hulu does continue to include some cable content, such as Viacom's "The Daily Show" that is not gratis, including from its three programming owners.

But broadcast content on NBC, Fox and ABC now holds a much greater value than it did four years ago. Networks are grabbing significant fees from cable/satellite/telco TV operators for rights to carry their programming. And at the same time, they are collecting a portion of the so-called retransmission consent fees their affiliates are getting.

Couldn't networks and affiliates get operators to pay them even more if there were no Hulu -- or other free streaming options? They could also charge operators for giving them some exclusive online rights.

The same dynamic goes for the emerging "TV Everywhere" platform, where operators want to make full TV service available online (and mobile) as a customer enticement. This marks another major opportunity for networks to charge operators handsomely for rights. For NBCU, News Corp. and Disney that includes selling packages with broadcast and cable networks. Again, the lack of Hulu could help drive up fees.

Then there is Netflix, which is transforming its business from a DVD mailer to an online streamer. These guys have cash! Enough they claim they can outbid HBO for some rights. Without Hulu as a potential competitor, couldn't Hulu owners get more from Netflix for streaming rights?

There are other options for the Hulu trio too, such as garnering cash from Amazon, Google for its new TV play, or Apple for iPad apps and added-value functionality.

Sure, Hulu owners want to have their cake and eat it, too. In a blog post, Hulu CEO Kilar wrote that Chernin said his "job was to maximize existing businesses, while at the same time ensuring that seeds were planted and nourished for new businesses that could thrive in the future."

Yet when it all adds up, if NBCU (now Comcast), News Corp. and Disney were to play a type of exclusivity card and use content as leverage, a calculus could show there would be more money from rights fees without Hulu driving down some demand.

Insight may be coming. CBS resisted joining Hulu and its CEO Leslie Moonves continues to indicate its buffet looks appetizing. "The great news is all these platforms want and need our content," he said Wednesday. "And they're offering us phenomenal deals, and we will make some."