Why Hulu's Next Heads May Roll
"Heads will roll." You hear that on lot on TV. (Currently there's a rogue UBS trader in London who has "some 'splaining" to do.)
But this phrase might also apply to Hulu's next owner -- namely, who will be making Hulu's TV content deals, and with what business model?
Some senior European TV executives believe Hulu has already "failed" in this regard --because senior Hulu officials haven't given up control of TV shows' advertising revenue. Ideally, content providers want two revenue streams -- from advertising and from some sort of customer fee.
Possible Hulu buyers are already concerned about the kinds of TV and movie content commitments -- exclusive or otherwise -- that could come along with the premium video site. Perhaps they should also be concerned about whether any of those big content owners will want to own a piece of the ad revenues, through a sharing arrangement or other means.
The new digital world can be fleeting, after all. Netflix now says that estimates for its customer base should be downgraded by around 1 million. That's a lot. On Thursday, the once high-flying company also got another downgrade when it received a 20% reduction in its stock price.
Back to Europe: Gerhard Zeiler, the chief executive of big European network group RTL TV, says advertiser deal points revenues are the main reason that not one big European terrestrial broadcaster has made a deal with Hulu.
What's to stop that same resistance from a new wave of TV producers and media companies who sense that ad revenues are also the most important upside in their financial future? (See the history of U.S. syndication ad revenues for some historical perspective).
Some producers, like Steven Levitan of "Modern Family," already feel that digital exposure of their shows has failed. What happens to sites like Hulu then? Heads may roll.