Hulu’s Staying Indie, and That’s Good for Web Video

Hulu is not going anywhere. After a long public tire-kicking period, the joint venture’s parent companies (Disney, NBC Universal, News Corp. and Providence Equity partners) have elected not to sell. Their new position is that they all sort of like and value Hulu, each in its own way.

While the bids for Hulu were said to be north of $2 billion, many of the alleged suitors were probably quite anxious about the many uncertainties of the deal. Namely the first window rights to shows were only guaranteed for a certain amount of years. Once you drove Hulu off the lot, it was already a depreciating asset. Except in this case, the dealer was telling the buyer, “It’s a great car, but in a few years it may not have an engine. But its will still look terrific and the wheels and electrical system may be worth something. Enjoy!”
Still, Google or Dish or Yahoo’s loss is the Web video market’s gain. Because Hulu, in its current form, is beloved by advertisers. It and the broadcast networks’ own sites pretty much sets the tone in the premium market. That has a Halo effect on the networks and second-tier players who are battling for the rest of a market that’s still immature. Hulu bestows quality onto a market that is inherently messy and immature. It’s even caused YouTube to raise its game considerably, despite delivering less than a quarter of its audience. If you care about competition, quality, and future growth, you don’t want Hulu mismanaged or baked into the Google monstrosity.
Hulu is also gradually starting to become an incubator of original Web series. While YouTube is a view machine, Hulu’s can provide a quality halo to new series, while also funnelling users from similar popular series. That fledgling market needs all the help it can get.
Of course, Hulu has plenty of challenges — and now that the sales process is over, maybe the company can take to addressing them (assuming CEO Jason Kilar is sticking around). Maybe now is the time to aggressively pursue a deal with CBS or the CW. Maybe Hulu should look to up its movie by going after the deals Netflix is losing or hasn’t closed (Starz? Disney?) It would take a lot of cash, but it could really change the way users view Hulu.
And for all of its success, Hulu needs to get bigger. It’s been stuck on 25 million or so unique users for a while, even as its engagement numbers balloon. Its partnership with Facebook should be a big help.
But overall, the online video business wins with an independent Hulu. Tremor Video even ran a trade-marketing campaign with the theme, “Thank You, Hulu.” The other winner in this no-deal scenario? Yahoo. If Yahoo wasn’t able to close the deal, better no one could, rather than having to stomach Google getting stronger, or somebody like Dish taking what Yahoo believed could have been a game changer.

More in Media

YouTube is under fire again, this time over child protection

Adalytics Research asks, ‘Are YouTube advertisers inadvertently harvesting data from millions of children?’

Illustration of a puzzle that spells out the word 'media.'

Media Briefing: Publishers pump up per-subscriber revenue amid ad revenue declines

Publishers’ Q2 earnings reveal digital advertising is still in a tight spot, but digital subscriptions are picking up steam.

Lessons for AI from the ad-tech era: ‘We’re living in a memory-less world’

Experts reflect how the failures of social media and online advertising can help the industry improve the next era of innovation.