Media

Looks like Hulu’s about to lose CEO Jason Kilar — and its competitive advantage

Image Credit: Jason Kilar photo: CharlieRose.com

Streaming TV and movie service Hulu could soon have a new CEO and lose many of the exclusive content deals that have made the business as successful as it is, according to a confidential memo obtained by Variety.

It’s been rumored for some time that Hulu CEO Jason Kilar would leave the company as soon as he could cash out his equity. That timing is pegged for September. Kilar was in the running for the Yahoo CEO position before Marissa Mayer stepped in, but he loudly declined.

But even bigger than potentially moving to a new CEO is a radical change to Hulu’s business model. Right now, Hulu has an exclusive on streaming much of TV’s current season content. This is why, say, Netflix only streams episodes from last season of your favorite show that’s airing now.

Hulu is a joint venture by News Corp. (Fox), NBC Universal, Disney (ABC), and Providence Equity. The three broadcasters are buying Providence out, so the networks will get more say over everything. They are reportedly planning to kill that current-TV-season advantage for Hulu and let other sites get in on the action.

The memo outlines the following big changes to Hulu’s content deals:

• No more exclusivity for current-season content once restricted to Hulu and the networks’ respective websites. 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.

• Fox wants to increase to four ads per commercial pod on Hulu.com.

If all these changes do go into effect, no wonder Kilar would want out. It would make the company a less attractive destination for online viewers and increase the importance of subscription-based Hulu Plus to the company.

Jason Kilar photo: CharlieRose.com