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Hulu Bites the Network Hands That Feed It TV Shows

If it takes nerve for a CEO to insult and anger a company's owners, then Hulu's chief exec must have had a steel transfusion. In a blog post announcing that Hulu was getting The Daily Show and The Colbert Report for a reputed $40 million to $50 million price tag, chief executive Jason Kilar sharply criticized the television business as it exists. In doing so, he raised a question: Is Kilar out of his mind?

Hulu doesn't exist without the good will of the networks. It needs video content to attract users. Hulu is owned in part by NBC Universal (CMCSA), News Corp (NWS), and The Walt Disney Company (DIS).

And yet, Kilar unloaded on the television industry in a way that would obviously cause anger at the networks. Addressing the future of TV, here are some of his points:

  • Consumers, advertisers, and content owners would be more powerful than program distributors in determining the future of TV.
  • Traditional TV has too many ads, which is why consumers use DVRs to skip them.
  • Consumers want TV to be more convenient for them.
  • Consumers are the "greatest marketing force" in television and movies and will make or break programming.
  • Advertisers have paid for wasted impressions and will soon demand to target their messages to people rather than to TV shows.
  • The bundling approaches that content owners use to maximize their income will give way if consumers can refuse to purchase them.
Kilar is right on all these points, by the way. The TV industry is undergoing tumultuous change. Unfortunately for Kilar, TV execs aren't likely to enjoy having their noses rubbed in a mess that's partly of their own making.

Of course, Kilar thinks Hulu is a big part of the necessary response to the changing situation and wants to underscore that. In doing so, he effectively told his bosses that their marketing and decisions aren't important, that they've blown it so far, and that their businesses -- and comfortable careers -- are in a slow-motion collapse.

Let's just say this was ill-advised at best. Had Kilar just noted that Hulu had the two shows back, he could have patted himself on the back and congratulated network managers on making decisions that were ultimately best for the industry and consumers. Instead, he spat in their faces. Not a good thing to do when people might just decide to be spiteful and withdraw programming -- or give it to another possible outlet, like Netflix (NFLX) or YouTube (GOOG).


Image: morgueFile user jdarwin.
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