Leaked: CEO Jason Kilar leaving Hulu as massive changes await
Michelle Clancy | 21-08-2012
Hulu CEO Jason Kilar could be fleeing the ship, leaving the online TV company as soon as September, according to a memo leaked to Variety. Or, he could be on the chopping block as Hulu's media owners look to effect big change at the company.
The memo contains three bullet points for the next phase of the company's existence, beginning with "Outline transition plan for new CEO. Discuss potential candidates and process."
Kilar, as a partial owner of the company (he shares a 10% share with other employees) will be eligible to cash out in September, which could garner him as much as $100 million, according to Variety. That offer may be too tempting for him to dismiss, prompting the company to craft a contingency plan, Variety points out.
However, Business Insider says that "A source close to a Hulu parent company tells us that figure is way off – way high," suggesting that Kilar may soon feel the impact of simple "management liquidity" as owner companies Disney, News Corp. and Comcast look to buy out fourth owner Providence Equity and implement some serious changes to the company.
Hulu offers two models: an ad-supported free site, and the premium subscription service, Hulu Plus. So far it has benefitted from the rights to distribute ABC, NBC and FOX content with varying degrees of exclusivity when it comes to current-season content--that's a big differentiator against other online streamers like Netflix and Amazon. That, however, is about to change, if Variety's reporting is accurate.
Disney and News Corp. are apparently looking for more control, including the ability to licence programming to other third-parties like Amazon, Yahoo! or YouTube. And, while thus far ABC.com and Fox.com have had to maintain "content parity" with Hulu--i.e. they can't offer anything for streaming that Hulu doesn't have--they would like to end that arrangement. And finally, whereas Hulu this far has been acting as a middleman, syndicating content to others, those rights will probably revert back to the parent studios.
The end result is a very different Hulu--one that will not be able to use its content as a differentiator, thus radically changing its revenue model as advertising will become much less valuable on the site.
It is clear that for the content owners, a change in strategy would benefit them by freeing up more licencing opportunities and, in the event of deciding to keep a portion of their own content for themselves, more online advertising inventory.
The owners have been trying to unload the site, at one point putting it up on the block last autumn before finding that they were unable to command the premium for the sale that they were looking for--largely because they were reluctant to offer as much in the way of content exclusivity as Hulu's suitors, which included Microsoft and Google, would have liked.