Peter Kafka

Recent Posts by Peter Kafka

With or Without Jason Kilar, Hulu’s Overhaul Will Be Huge

Asa Mathat / AllThingsD.com

So, yes. It certainly appears that Jason Kilar will be leaving Hulu soon.

Of course, it has appeared that way for a long time. And he’s still there.

But Variety’s excellent story (registration required), sparked by an internal memo laying out scenarios for the video site’s future, now pegs his likely exit date to September. That’s when a deal to let Kilar and his fellow employees cash out their equity stakes should go into effect.

Once that’s finally done — those wheels have formally been in motion since April, when investor Providence Equity got its own cash-out deal lined up — it’s hard to imagine Kilar staying, though he could if he wanted to.

I’ve asked around, and both on and off the record, sources on all sides say that no one has made any decisions about anything. Which could even be true. We should note that even while this has dragged on, Kilar has never dropped his game face, and in the meantime has rolled out stuff like a cool integration with Apple TV.

But, one day, Franco-style, Kilar will leave. And then we (that is, I) can stop running reports about his imminent departure.

The bigger news in the Variety story is the rest of the stuff in the memo, which is about the future of Hulu itself, regardless of who runs it.

In short, it paints a picture of a site and service that will operate much differently than the one that launched in 2008. Instead of being the Web’s primary place to see TV shows from Fox, NBC, and ABC, Hulu will now be one place among many where you can see some of that stuff. With certain restrictions. (News Corp., which owns Fox, also owns this Web site.)

There are a bunch of reasons for that, but the basic one is that it’s not 2008 anymore. That means Hulu’s owners are no longer as terrified of Google and YouTube as they once were, so it’s less important to them to have a single portal as leverage in negotiations. And Hulu’s owners are most interested in getting cable-carriage fees for their programming, which means they’re much less interested in giving them away for free, without restrictions, on Hulu.

From Variety’s highlighting of the big changes outlined in the memo:

• No more exclusivity for current-season content once restricted to Hulu and the networks’ respective Web sites. Now Disney and News Corp. can turn around and license programming to another third-party, i.e. YouTube, which could dilute Hulu’s competitive advantage in the marketplace.

• No more content parity. ABC.com and Fox.com will be able to hold back certain content to differentiate their own sites from Hulu, which was once entitled to everything on the networks’ sites.

• Exclusive “super-distribution” rights Hulu once retained to syndicate content to third-party sites like Yahoo and AOL would revert back to Disney and News Corp.

Alas, Variety doesn’t publish the memo itself. And the story is oblique about what the document actually is — we don’t know if this is a summary of stuff Hulu’s owners have agreed to do, or are discussing, etc.

But it has been clear for some time that Hulu has been headed in this direction. Its owners are happy to use it as a subscription service, if it generates ancillary revenue for them. But they’re not interested in using it as a free service that competes with their other properties — or, most importantly, one that threatens their ability to get license fees.

That’s a much more constrained vision for Hulu than the one Kilar and company rolled out four years ago. But it’s in lockstep with the rest of Big Media’s current stance about digital video. And it could still be an interesting business for someone to run.

Very unlikely that someone will be Kilar.


Latest Video

View all videos »

Search »

I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik