Peter Kafka

Recent Posts by Peter Kafka

Big Media Tells Big Media That Hulu Is Hurting Big Media

Dear TV business:
All that free TV that you’re giving away at Hulu and other sites? That’s hurting the TV business.
The TV business.

That’s my translation of comments from Turner Broadcasting’s Phil Kent today. The head of Time Warner’s cable network told the crowd at a Citigroup investment conference that his company had pulled out of bidding for reruns of “Modern Family” because the show was “a little too prevalent on the Internet.”

The sitcom runs on both and Hulu, so I’m not clear if Kent was talking about one or the other, or both. Either way, those comments have to simultaneously please and dismay “Modern Family” creator Steve Levitan, who has complained that giving away streams of his show on Hulu doesn’t do him any good and probably does him harm.

Levitan isn’t the only one who thinks that way: There are plenty of TV people who worry that free streaming on the Web is hurting their business, either by sapping ratings or cutting down on the appetite for DVDs and syndication. In this case, the supposed value shrinkage hurts News Corp., which produces the show and owns the rerun rights, more than it does Disney’s ABC, which airs the initial run. (News Corp. also owns this Web site.)

That’s one of the fundamental tensions Hulu has to deal with, and the primary reason why taking the joint venture public remains such a long shot–until all of its owner/partners are willing to make long-term programming commitments to the site, it’s hard to see the long-term value in the company.

Still, it’s important to note that Kent didn’t abstain from bidding–he simply dropped out. The Los Angeles Times’ plugged-in Joe Flint estimates that Turner was willing to pay about $1 million per episode, which isn’t as much as the winning $1.4 million bid, but isn’t immaterial, either.

Oh. And the winner of the bid? GE’s NBC Universal–one of Hulu’s three owner/partners.

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