Dis*Content: Why Can’t Google Invest in Hulu? Or At Least Do A Syndication Deal
In our occasional, slightly out-there look at the industry
As I have been playing around with Sling.com, the new video portal from Echostar-owned Sling Media, this thought came to mind: if Sling can make a deal with Hulu to essentially create a competitor to Hulu, then why can’t Google (NSDQ: GOOG) make a deal with the News Corp-NBCU JV? With YouTube, Google will continue having a tough time doing mainstream full-episode TV deals. I think even YouTube realizes it, as its head of content partnerships Jordan Hoffner hinted in his speech at B&C’s OnScreen Media Summit this week: “If people want to see the last episode of Ugly Betty they know they can go to ABC.com, but on the other side, we can compete by getting into everyone’s old favorite [TV shows] and feature films ... Given the audience and how big it is, do we essentially become the museum of broadcasting? Do you start doing deals for libraries?” Pretty boring, if you ask me.
The way YouTube is currently tooled and perceived, it will not be a lean-back experience for most users. Hoffner’s main message was: “YouTube is a great place for premium content ... But we need to do a better job of creating areas where the user can go and know what they are going to get.” And that is the biggest dilemma for the company. Then Google has to deal with YouTube’s monetization head on, especially as the next year is going to be a tough slog for everyone.
One way to get out of this rut of sorts is to work with the perceived rival Hulu, and perhaps even look at taking a stake in it. Some eyebrows will be raised from a regulatory perspective if they do a deal, for sure, but assuming that can be dealt with in structuring any deal, it could help both parties: Hulu would be able to get a lot more traffic, and YouTube would be able to get a backdoor deal into mainstream content. And it is not like Hulu has completely figured out the monetization bit itself, despite the hype around it. Should a cash crunch hit because of the changing economic climate, (it raised $100 million from Providence), Google could be a ready investor.
Also, my guess is that the honeymoon that Hulu is enjoying could run into some headwind mainly due to internal politics between News Corp/Fox and NBC Universal, fierce rivals otherwise. I have heard some rumblings from the Fox Broadcasting side about how much exposure NBCU’s shows are getting through Hulu, as opposed to their own, which may or may not be justified, but could balloon into something more serious in the future. In that case, again, Google could play the mediator and a good ally for Hulu, the independent entity.
Anyway, for now, this is just a trial balloon on my part. Of course, stranger things have happened.
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Comments (8)
Dec 5, 2008 8:30 PM
Rafat - that would be interesting. In fact, I have started to see Hulu embeds pop up on other video sharing sites (DailyMotion, Break) - although in a limited fashion (1 giant, meta user account).
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Sling will be an interesting one to watch, but for those without a Sling box, Mefeedia.com is set top box-independent, so you aren’t behold to one set top box or another.
Dec 5, 2008 9:00 PM
If you think that for Hulu (aka FOX/NBC) Google is NOT the enemy, then I can’t figure out how you got this job!
Dec 5, 2008 9:00 PM
If Hulu does a deal with Google, and gives YouTube a backdoor way of getting premium content, then all those YouTube users (and everyone else) will just go to YouTube, not Hulu. Hulu may collect some ad revenue, but because YouTube has such significant traffic (way beyond that of any other video site out there) then from a branding perspective users would think “YouTube” not “Hulu” to watch the latest episode of The Office. The deals Hulu has done with Dailymotion, break.com, blinkx.com, etc. allow them to get their brand in front of users who are looking for premium content, but ultimately drive traffic BACK TO HULU!
Dec 5, 2008 9:01 PM
Honestly, why don’t you just ask Hulu, and FOX and NBCU for that matter just fire their whole advertising team and give the business to Google! If you are a major media company/publisher, and you are in bed with Google, you should get your head out of the sand! As the General Council of NBCU said a few weeks ago at the Future of TV event in NYC; “The great thing about Tina Fey’s skits of Sarah Palin on SNL, was not that it drove a lot of video streams on YouTube, but that it drove traffic and brand awareness to Hulu.com”
ps: create longer submit forms so people don’t have to break up their rants!
Dec 5, 2008 10:25 PM
This is not shocking at all, the issue here is that Google hopes to one day get direct content deals with NBCU/Fox without sacrificing ad revenue to Hulu.
Hulu does not allow 3rd parties to re-sell ad inventory and as such, much of the power that Google would bring to such an experience would be diminished. Google isn’t in the business of needing a small % rev share; and they can wait out the content contracts that Hulu has. For example, with content restricted to the United States (as per Hulu today), how much money WOULD Google stand to make based on the publicly understood Hulu rev share deals?
IMO - YouTube will continue to lockup content deals and will pressure NBCU/Fox to sign up once their contractual obligations to Hulu sunset.
Dec 9, 2008 3:18 PM
Keep an eye on Funn Networks. Rumor has it they have been in stealth since 02’ and have the iP’s to back a propritary content and ad delivery service that MPAA, Harry Fox and others are looking very closely in working with. If and when Funn launches, content owners of all sizes will be able to do things they have never been able to do.
Dec 10, 2008 5:53 PM
Do you really think Hulu, in light of the plight of Big Media, ex., GE/NBC cutting out 5 hours of primetime, down to or less than even FOX that they would allow any opportunity for a competitor, Google/YouTube, to gain a beachhead with premium content?
I guess we can look forward to more talk shows on Hulu, so say we all!
Dec 17, 2008 5:49 AM
Google even if make a deal with Hulu whats the point, this is the most strange thing that have happened. As John Doe says keep an eye on Funn Networks. that will be the best thing to do.
main reason i suppose is that Google does not allow third parties to resell the ads.