MAY 18, 2011 Hulu Near Deal to Keep Shows Coming
By JESSICA E. VASCELLARO And SAM SCHECHNER Wall Street Journal http://online.wsj.com/article/SB10001424052748703421204576329670970254188.html Hulu LLC is close to renewing its deal for TV shows from its media-company owners in a move that would secure the future of the online-video site but could delay Hulu's access to some shows for its free service, people familiar with the matter said. As competition in the online-video market heats up, the proposed multiyear deal preserves Hulu's exclusive rights to show current TV episodes on its free site at the same time the media companies offer them free on their own websites, these people said. But the new pacts could help the companies sell their programming elsewhere, particularly to cable and satellite providers that want to offer online-video services, by allowing them to delay offering it to Hulu's free site, under certain conditions. The progress toward a new deal represents some rapprochement between Hulu and its owners. In recent months, Hulu and those companies have clashed internally over issues such as media companies' efforts to distribute more content on other services, such as Netflix Inc., and the pricing of Hulu's subscription service, Hulu Plus, people familiar with the matter said. Media companies aren't prohibited from striking online deals with cable and satellite companies under their current Hulu agreement, which they are renewing ahead of its expiration. But the new deal goes into new detail about the various circumstances in which media companies could delay offering programs on Hulu's free site to make it more attractive for cable and satellite companies to pay for their content. Under one arrangement that has been discussed, media companies could keep their shows from appearing on Hulu for three to seven days after the shows air, a person familiar with the matter said. Currently many TV shows appear on Hulu's free site the night after they air. Hulu is owned by News Corp., Walt Disney Co., Comcast Corp.'s NBCUniversal and Providence Equity Partners, with Hulu employees also holding some stock. News Corp. also owns the Wall Street Journal. Hulu Chief Executive Jason Kilar said in a statement that the company has had "productive conversations to extend our existing content agreements materially further with Disney, News Corp. and NBCUniversal" and that the company is "excited about the road ahead." A Hulu spokeswoman said the statement reflected the views of all Hulu's owners. The deal comes as media companies are searching for digital partners willing to pay them to distribute their TV shows and movies. When Hulu was founded in 2007, and then when Disney joined in 2009, few companies were willing to do so. But the market has changed. Netflix and Amazon.com are eager to do deals and traditional television distributors are also making a big push into the online market. In an earnings call last week, Disney Chief Executive Robert Iger said the company never expected Hulu to be an exclusive distributor, except in certain cases. "We continue to look opportunistically at all of the new platforms that are entering the space," he said. "We don't intend to let a platform, even one that we own, necessarily get in the way of our ability to do that." Pay-TV distributors including Comcast, Time Warner Cable Inc., DirecTV and Dish Network Corp. have launched or begun testing services that allow paying subscribers to access TV programming online. The companies aim to prevent subscribers who prefer to watch video online from canceling their pay-TV service as it becomes possible to watch more TV through services like Hulu. But they have struggled to land content from media companies, in part because the services weren't developed enough for media companies to take them seriously, according to media executives. As those services acquire more content and customers, media companies are starting to take notice and are hoping to cut new deals to supplement their existing pacts with providers like Hulu. Because media companies depend heavily on the subscriber fees those companies pay to carry their cable, and increasingly, broadcast networks, they have a vested interest in helping services that discourage people from canceling their cable subscriptions. After the new agreement is finalized, Hulu's owners are expected to turn their attention to other matters they have discussed on and off in recent months, such as the desire of Hulu's management to raise more capital to license more shows and to allow some employees to cash out some of their equity in the service, people familiar with the matter said. Mr. Kilar's CEO contract expires this summer, a person familiar with the matter said. The person said renegotiation talks haven't formally begun. In recent conversations between the owners, Hulu's owners have expressed support for him staying, according to a person with knowledge of the discussion. The website AllThingsD earlier reported that Hulu was close to a new agreement with its owners. _______________________________________________ Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
