OK, Hulu. What’s Next?

Comcast’s NBC Universal, News Corp and Disney yanked around a lot of people and wasted their time and money before deciding that keeping Hulu is the best way for them to remain in control of their Internet future. With every passing day and every smart TV that’s sold, it’s increasingly obvious that OTT will become a prime way to distribute paid content — perhaps even THE prime way. Nothing beats owning your own highway to where the customers are increasingly looking for content.

Each of the three network could go its own way and distribute content directly as Viacom’s Paramount is testing. There are many advantages to that including avoiding anti-trust laws.

They could also really bond together and develop a front end for consumers that is a one-stop shop for all of their goodies much as what TV Guide has done with TVGuide.com.

There are two other matters they need to clean up:

1. The FCC has prohibited Comcast and its NBC Universal from strategic management of Hulu. Comcast could sell out to the other Hulu owners. It probably wants to chart its own course on the Net as shown by its OTT and VoD efforts. It could sell out to a another company like Time Warner, which owns Warner Bros and a number of pay TV channels like CNN and TBS. Viacom might also be interested, what with owning Paramount Pictures and a number of pay TV channels like Comedy Central and MTV.

Sony should be interested in buying into Hulu but probably isn’t — too busy strategizing about its money-losing TV operations. It has lots of content — Sony Pictures, Sony Music — plus every type of CE device that will need content. Think about what Amazon is doing with launching devices that will consume its content! Sony may soon have even more mobile devices if and when it buys the 50% of Sony Ericsson it doesn’t own.

2. Providence Equity Partners, the fourth Hulu owner, is only in it for the money and to lend credibility by being a non-content owning owner. It may be itching to sell out and the remaining owners may have to buy its shares. It is also in the best position to take Hulu public if that becomes the owners’ choice. It has $23 billion invested in companies in the media and communications industry.

See: http://www.provequity.com/portfolio/index.asp?Section=0,2,1&

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