GigaOM » jason kilar

Hulu’s content chief Andy Forssell officially takes over as acting CEO

Janko Roettgers — Thu, 14 Mar 2013 22:44:39 +0000

Hulu has officially announced that its SVP of content Andy Forssell will become its acting CEO when founding CEO Jason Kilar leaves the company at the end of the month. Kilar made the announcement himself Thursday afternoon on Hulu’s blog, writing:

“You know Andy well; he’s been a critical senior executive and has been here from the start of this great adventure. Andy exemplifies the Hulu culture and has been central to Hulu’s journey, helping to grow this company from 2 content partners and no revenue to over 450 content partners and approximately $700 million revenue in 2012.”

It’s been an open secret that Forssell was on the shortlist to become Hulu CEO for some time. I first heard a rumor about this in early January, and Adweek wrote that he was a likely candidate later that month. However, there were also a number of other names floating around, including at least one executive from Hulu co-owner Disney.

Speaking of co-owners: The fact that Forssell only got the job as acting CEO has a lot to do with Disney and News Corp. disagreeing over Hulu’s future. News Corp. wants to steer Hulu towards a paid subscription future, whereas Disney prefers the free, ad-based part of Hulu’s business. Finding a permanent CEO for a company whose future is in flux is apparently not that easy, which Kilar indirectly acknowledged in his blog post:

Disney and News Corporation are currently finalizing their forward-looking plans with Hulu, and the senior team has been working closely with them in that process. Once the plans are finalized, a permanent decision will be made regarding the CEO position.

The Wall Street Journal reported earlier this month that both Disney and News Corp. are considering buying the other partner out to take over majority control of Hulu. Comcast, the third studio major owner, is barred from making any decisions on Hulu’s future due to the NBC-Comcast merger conditions.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

From ClownCo to Video Star: Hulu beyond Jason Kilar

Om Malik — Fri, 04 Jan 2013 23:37:32 +0000

In 2007, when I first heard about Hulu, it was not-so-lovingly labelled ClownCo by Google insiders and many of my colleagues in the technology blogging world. I mocked the company and even created a NewCo wreck watch countdown clock before the ClownCo went down in flames. Along came Jason Kilar and boy did he make me eat crow — a well charred crow on top of that. And he did it the old fashioned way: he treated the most convoluted of corporate structures like a startup that was liberally funded by Providence Equity Partners.

Kilar had spent a lot of time next to Amazon’s maverick CEO Jeff Bezos and he learned well from the master of disruption. Like Bezos, he focused on playing the long game and ignored the naysayers.

He used his rolodex to hire the right people. He went to China and acquired a piece of technology to roll out Hulu to the masses at a breakneck speed. Most importantly, the team at Hulu built a simple, elegant and easy to use a minimalistic service: which no one expected. It was so good and I was so wrong. And glad I was, for when I was recovering from my illness in 2008, Hulu became a constant bedside companion.

There are some in Silicon Valley who ask me why I am a fan of Kilar. Here is why:

Hollywood is about profit maximization even at the expense of paying public.
Silicon Valley is about building a great consumer experience and build profits in the long term. Google and Amazon are two perfect examples.

Jason was able to marry both those constituencies. Don’t believe me? Just look at the site’s financial performance: at the end of 2012 it had three million Hulu plus subscribers and about $695 million in revenue. The number of paying subscribers for Hulu Japan tripled in comparison to 2011.

With so much good news, it perhaps was the right time for Kilar to announce that he is going to be leaving the company sometime during the first quarter of 2013. It is not as big a shock for his departure has been rumored for a while, especially since the company’s big media owners recently completed a buyout of co-owner Providence Equity. Hulu’s co-owners including Comcast’s NBCUniversal, Disney and News Corp., have been plotting the future without Kilar.

Herding cats

Hulu CEO Jason Kilar with former CTO Eric Feng

Many of my sources have told me that Kilar was more like a UN peacemaker and trying to organize board meetings with the media-doyens was a nightmare. A Fast Company profile last year pointed out that Kilar had skills to manage up. But things went progressively south after the exit of Peter Chernin, the News Corp. COO who was the heavy on the board and who loved the concept of Hulu. That Kilar survived and helped turn Hulu into a business that 3-million people want to pay for is a testimony to his (and his team’s) skills.

My initial skepticism of this big consortium came from years of observing such beasts of burden trample over saplings of innovation, mostly because the new way threatened their established business practices. At the turn of the century, a Silicon Valley company called @Home Networks had a bold idea: send broadband via cables owned by cable networks. The idea was backed by the likes of John Doerr and soon all big cable companies such as Tele-Communications Inc. (later acquired by AT&T, which was in turn gulped by Comcast) became investors in @Home Networks.

While @Home suffered from adult management, it was the cable companies which essentially killed the pioneer. Once they learned that they could buffer their profits by selling broadband, they proceeded to kill the baby they had helped birth.

Show must go on

Having seen that movie before, I knew that Hulu would have similar problems. With Jason gone and private equity investors having locked in their profits, get ready for the egotistical media companies get their evil way with Hulu.

Kilar will leave Hulu at an interesting juncture. The rise of multiscreen households has turned the video business on its head. The relevance of the older media distribution channels is on the wane and we are transitioning to broadband and web. Think about it this way: world’s biggest live event didn’t happen on ESPN, Fox or NBC. Instead it was YouTube that hosted the Felix Baumgartner’s space jump. South Korean pop star Psy has had a billion views on YouTube. I bet you the top 100 artists have not received that kind of attention on MTV.

The fact is that we are looking at a world where Netflix and Amazon Prime along with YouTube are the cynosure of attention when it comes to video. Hulu has it for now, but its big media owners have their legacy businesses to protect. They need to make the TV station owners happy. They need to fleece the cable customers by selling them packages no one wants.

Hulu was their bridge to the future — but large media companies suffer from a weird kind of astigmatism. They are businesses set up to serve other businesses — movie theaters, cable companies, satellite companies, DVD sellers and now on-demand video providers. That is why they can’t put viewers first, even if they want to.

Too bad, Kilar isn’t going to be there to look out for viewing public.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Hulu CEO is leaving as company wrestles with future

Jeff John Roberts — Fri, 04 Jan 2013 21:24:46 +0000

It’s finally happened. Hulu CEO Jason Kilar announced today that he will be walking away from the video site by the end of this quarter. SVP and Chief Technology Officer Rich Tom will be heading out the door with him.

The news, which Kilar announced Friday via a memo on Hulu’s company blog, comes after a year of uncertainty about the video site’s ownership and strategy. In the memo, Kilar describes the decision to leave as difficult and explains he and Tom will stay on for a while to manage the transition. He also cited what he sees as Hulu’s accomplishments:

We have grown from a few hundred thousand in revenue in 2007 to generating almost $700 million in revenue in 2012 alone. We have created a video subscription service that is growing unusually fast, adding over 200K new subscribers in the past 7 days alone (a new record). We have proudly generated over $1 Billion for our content partners since we excitedly entered private beta in October 2007.

As reported by my colleague Janko Roettgers, Kilar and Hulu’s corporate owners, including Disney and News Corp, have clashed over the future vision of the site. It’s unclear, for instance, whether Hulu wants to be become a wide open YouTube-type site or instead act as a TV-everywhere type extension that would only be accessible to those who could authenticate with a cable subscription code. These tensions also deepened after a buyout of co-owners Providence Equity Partner last summer.

We’ll have more on Kilar’s departure and the future of Hulu later today. The entirety of Kilar’s note to Hulu employees follows below:

Earlier today, I sent the below email to the Hulu team:

In what is an understatement, this email has proven difficult for me to both write and send.

I’ve decided to depart Hulu in Q1. I am currently working with the Board to ensure there is ample runway to manage this transition.

Rich Tom will be doing the same, with roughly the same departure date. Rich and I have been fortunate to build and innovate alongside each other these past 5+ years and our plan is to do more of that on the road ahead.

It is impossible to state in words how much this team means to me, how much Hulu means to me. But I’ll do my best.

For me, the journey started with a move to California and a walk into an empty office suite in early July 2007. In the weeks afterward, some brave souls that were willing to look past the many naysayers and ClownCo moniker jumped aboard and got about the business of innovating and building. Five and a half years later, thanks to the missionary work of this amazing 600+ worldwide team and courageous, prescient partners, we are fortunate to have collectively built a culture that matters, a brand that matters, a business that matters. Our convictions and our relentless pursuit of better ways have made the difference and will continue to make the difference. We have grown from a few hundred thousand in revenue in 2007 to generating almost $700 million in revenue in 2012 alone. We have created a video subscription service that is growing unusually fast, adding over 200K new subscribers in the past 7 days alone (a new record). We have proudly generated over $1 Billion for our content partners since we excitedly entered private beta in October 2007. Our video advertising service delivers world-class results and sets the pace for the industry. We have authored scores of inventions along the way.

And while the above outputs are impressive and laudatory, the things that have clearly brought the most joy to my heart (and what I believe to be the most important inputs in our business) have been this team and the values and principles we hold dear.

Perhaps the best way to express this is to let you in on a little routine I have followed these past 5+ years. Each day, as I enter the office lobby, I take the time to enjoy the many portraits of our team members that line the walls. From Damon gorging on a 2 foot high cold cut sandwich to Jesse showing off his sweet kicks. Portraits from Beijing to Boston and the other fine Hulu offices in between. Those portraits – along with the What Defines Hulu? document on those same walls – mean so much to me, as it is a daily and vivid reminder of how great this team is and how we bring such passion and principle to what we do. Without fail, I am reminded in those moments of reflection why we do what we do, why this work is a mission and never a job.

I’ve been so fortunate to play a role in this amazing, ongoing journey. My decision to depart has been one of the toughest I’ve ever made. Though the words will fall short of the intended mark, please know how much this team means to me and how very thankful I am to be able to innovate and build alongside you each day.

As dates and other items get solidified, I will update the team. But in the meantime and for much of Q1, I will be here as we get off to a very strong start in 2013…

Jason

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Hulu made $695M in 2012, now has 3M Hulu Plus subscribers

Janko Roettgers — Mon, 17 Dec 2012 18:01:05 +0000

Hulu generated $695 million in revenue in 2012, according to a year-end blog post published by its CEO Jason Kilar Monday morning. The service was also able to grow its base of Hulu Plus subscribers — who pay $7.99 per month for streaming — to more than three million. In 2011, Hulu made a little more than $400 million, with less than 1.5 million Hulu Plus subscribers.

Here are some other key metrics shared by Kilar:

In addition to traditional PCs and laptops, Hulu Plus is now available via than 320 million connected devices in the U.S.
Hulu grew its content offering by 40 percent in 2012. The company now offers 60,000 TV episodes, 2,300 TV series, and 50,000 hours of video across Hulu and Hulu Plus.
Hulu invested more than $500 million in content this year, and has paid more than $1 billion to content owners since its launch.
This year, Hulu served more than 1,000 advertisers — 28 more than in 2011.
The number of paying subscribers for Hulu Japan tripled in comparison to last year, but the company didn’t release any absolute numbers.

Last time around, Kilar predicted that Hulu Plus would amount for more than 50 percent of Hulu’s revenue in 2012. He didn’t mention that goal in this post, but we’ve been hearing that the company safely crossed that mark, meaning that Hulu is now first and foremost a subscription service that also has a healthy ad business.

Kilar made as much clear in his post, where he attributed the company’s success to both lines of its business:

“At Hulu, we are doubly fortunate in that we are at the crest of two massive waves that we believe will persist for the long term: the rise of online video advertising and the rise of online video subscription services.”

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Big surprise: Hulu’s owners can’t agree on its future

Janko Roettgers — Mon, 20 Aug 2012 06:09:32 +0000

Hulu’s corporate parents are set to buy out their co-owner Providence Equity Partners by September, and the deal could trigger numerous changes to the site, according to a Variety report that’s based on a leaked memo obtained by the publication.

One consequence: Hulu CEO Jason Kilar could be set to cash out up to $100 million in equity – and that windfall seems to worry News Corp. and Disney, who both own close to 30 percent of the company. The media conglomerates seem to fear that Kilar could jump ship, and the memo obtained by Variety seems to indicate that they’re working on contingency plans (Comcast also owns roughly a third of Hulu, but doesn’t have any direct influence on the company’s future due to conditions for its merger with NBC Universal).

The report also suggests that the Providence buy-out could lead to a number of licensing changes, which could in turn lead to Hulu losing exclusivity for some of its content.

But come September, Hulu’s owners may be confronted with an even bigger question: What will Hulu’s future look like? And that’s where News Corp. and Disney seem to have somewhat different ideas.

New Corp. wants to double down on authentication. Fox shows started showing up with an eight day delay on Hulu a year ago. Only viewers that either subscribe to Hulu Plus or authenticate themselves as pay TV subscribers have next-day access to shows like Glee or Family Guy. So far, Hulu is providing authentication for subscribers of Dish, Verizon and CableOne. News Corp. wants to quickly extend this to other pay TV operators.

Disney, on the other hand, wants nothing to do with this kind of authentication, according to Variety. That’s notable, because many observers have speculated time and again that Hulu will eventually transform to a TV Everywhere service that will only give pay TV subscribers access to its content. That kind of future seems to be a bit more uncertain now.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Yahoo board keeps Levinsohn CEO decision under wraps

Staci D. Kramer — Thu, 12 Jul 2012 08:45:13 +0000

The Yahoo board seems determined to continue making who will be CEO the story, instead of what the CEO will do or what the digital media company is accomplishing. The board met Wednesday in advance of Thursday’s annual meeting and next week’s earnings but held back on an announcement about whether interim CEO and media chief Ross Levinsohn has the job.

It would seem to be simple enough, which is why many people expected that news Wednesday and why Yahoo might start running into problems if it isn’t announced today, preferably before the board meeting. Holding off any longer, if it is Levinsohn, makes little sense unless someone hopes a later announcement will overshadow earnings. That would be a mistake.

The two-month search for the third CEO in a year — typing that really drives it home — even took over the headlines of a big win for Yahoo when the Facebook patent agreement should have been the only company news getting attention.

Instead, the overarching story was who else might be in the running for CEO and, just as the Facebook settlement was coming out, Hulu said its CEO Jason Kilar, considered by some to be a leading candidate for the Yahoo post, “graciously” took himself out of the running. Levinsohn’s work with Facebook to repair the relationship damaged by ex-CEO Scott Thompson’s lawsuit over patents (supported by some still on the board) and the details of the deal got attention but much of it was still in the context of whether it would help him get the job.

Dayenu (a Hebrew word that means “enough already”). Levinsohn won’t make all the right moves — no CEO does– but he has deep inside and industry knowledge plus the backing of enough people inside and out to start from a better foundation than most Yahoo CEOs of the modern era have had. Dragging it out even this long risks undermining that.

Pivotal Research Group’s Brian Wieser put it like this in a client note Wednesday:

“BOTTOM LINE. We believe the Yahoo Board of Directors will soon announce that Ross Levinsohn will formally become its new permanent CEO. We would view such news favorably, as it involves the installation of an individual with most of what the company needs for the role. It also eliminates risks associated with a transition if someone else were chosen.”

At this point, about the only hire Yahoo could make instead of Levinsohn for the role and get away with it would be Sheryl Sandberg. The chances of that, of course, are slim and none.

An announcement could come as early as this morning. We can only hope.

Update: So much for hope. Nothing today, and if Kara Swisher’s sources are on mark, nothing anything soon as the board equates a lengthy search process with a careful one. A look at recent history would show that’s not always the case but this new board would rather not follow the previous board’s track record with its first choice of CEO. The board, writes Kara, “still is pondering if Levinsohn is the right leader for the company, debating whether a more product-centric exec or one who has had more CEO experience is the better choice for the future direction of the company.”

Meanwhile. Levinsohn is in the spotlight and has chalked up some wins. He considered leaving when Scott Thompson first got the job and I doubt he’d have stayed much longer with the former PayPal exec in charge. Will he stay through this process? Even though he’s been able to hire top execs and make his own org chart, some of his supporters are warning the board not to take him for granted. The suggestion isn’t that he would leave in a huff but that he’s be more vulnerable to offers from other companies searching for senior or top execs. Names raised include Comcast — and Hulu, if Kilar negotiates his way off the island.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Yahoo CEO watch: Levinsohn alone on deck

Staci D. Kramer — Fri, 06 Jul 2012 23:49:13 +0000

With less than a week to go before its July 12th annual meeting, Yahoo was able to announce good news Friday — calming fears that it was headed to a costly, lengthy legal feud with Facebook. But the news that should have been Yahoo’s only talking point today had to share a stage with the search for a CEO. Here’s a Storify look at how that played to the virtual crowd:

[View the story "Yahoo CEO watch: Levinsohn alone on deck" on Storify]

Yahoo CEO watch: Levinsohn alone on deck

Ross Levinsohn has been interim CEO of Yahoo for nearly two months while the board conducts a search for the right person to succeed ousted CEO Scott Thompson. That should be ending any day now.

Storified by Staci D Kramer · Fri, Jul 06 2012 16:57:26

Yahoo and Facebook announcing that they will avoid the patent version of the Hundred Years’ War should be enough to seal the deal for interim CEO Ross Levinsohn, credited with the change in strategy, to get the “i” word removed from his title. It should be but the Yahoo board, even with so many new members, is a Yogi Berra kind of group: “You never know.”

It’s not often a sitting CEO has the PR department issue a statement about possible employment with another company but that’s just what Jason Kilar did Friday when Hulu sent out a statement responding to reports that he was the last candidate standing between Ross Levinsohn and the job of Yahoo CEO:

”As has been reported, Jason Kilar has been a focus of the Yahoo CEO

search committee. He has graciously declined to be considered.”

Kilar’s statement confirmed what paidContent reported earlier: the Hulu CEO was not in the running. But the wording was murky enough to leave room for speculation: was he a finalist who withdrew? Was he offered the job and didn’t take it? Did he ever get to third base? My vote: it never got to offer stage,

The rarity of the statement aside, use of the word “graciously” to describe the person having it sent out rang a little off. (It reminded me of the New York delegate to the Second Continental Congress in 1776 who constantly abstains “courteously.”)

He rang a little odd with others, too:

kilar’s ‘graciously declined’ line on yahoo job is a deliciously odd turn of phrase.Brian Morrissey

CNN Money’s Dan Primack took it and ran:

Got to wonder: At this point, did Kilar decline to be considered in the same way that McCain declined to be considered for president?danprimack

Remember when Juwan Howard "graciously declined" to start over LeBron?danprimack

I assume the "graciously " means there was a bouquet of flowers involved.danprimack

JK: "Don’t consider me." YHOO: "We’re still going to consider you." JK: "Please don’t." YHOO: "Oh, that was gracious. Ok."danprimack

@danprimack it means he said no before he was said no to! Sly for sureKara Swisher

Hulu CEO isn’t leaving for Yahoo job http://cnnmon.ie/M5o6pi. Theories from @danprimack on why: http://bit.ly/M5o9kUCNNMoney Tech

Fred Amoroso, who became chairman of the board the day Levinsohn was appointed interim CEO, reportedly told Yahoo employees in May:

.@Yahoo chairman Fred Amoroso said he would like to see @rossLevinsohn become permanent CEO: http://bloom.bg/LSibBK via @BloombergNewsEdmund Lee

A lot of people inside and out of Yahoo have expected all along that Levinsohn will get the nod since Thompson flamed out.

Inside Yahoo, word is that Ross Levinsohn really is the one for the CEO job http://cnet.co/MGiIbJCNET News

But the decision to conduct a search left its probable CEO, who was in the running last time when Thompson was hired from eBay and PayPal, open to moves that suggest he might not be the first choice yet again — that he might only get the job because Kilar didn’t want it.. Not an ideal situation.

Twitter is voting Ross Levinsohn Yahoo CEO by acclamation (see prior RTs). Maybe Twitter should be Yahoo’s board.Jeff Jarvis

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Will the Yahoo board stick with Levinsohn?

Staci D. Kramer — Fri, 06 Jul 2012 00:57:12 +0000

When CEO Scott Thompson was ushered out the door in May after a resume scandal, the new Yahoo board asked media lead Ross Levinsohn to serve as interim CEO while a new search committee tried to repair the damage of the last one. Levinsohn, who missed the cut when Thompson was hired, would be a serious candidate – but as part of a wider formal search.

In the weeks since, Levinsohn has made key hires, including former News Corp. colleague Michael Barrett as EVP and chief revenue officer, and has unwound Thompson’s version of what the company should look like. Each move lent credence to the idea that he would be CEO when the dust settles, but the search didn’t stop. A week before Yahoo’s July 12th annual meeting, the drumbeats are getting louder – but that doesn’t mean Levinsohn is out…

Thursday, in an all-caps tweet, Reuters tried to sell the idea that the search committee is talking to Jon Miller, the chief digital officer at News Corp. For nearly any other media CEO job, that report would make sense – Miller is a usual suspect of the first degree. But Miller not only is a friend and former business partner of Levinsohn’s, he endorsed him for the job on stage at paidContent 2012 and explained why he thought the board was going in the right direction. That was a non-starter. (Reuters tried to tone it down later).

Hulu CEO Jason Kilar’s name also has also come up, tweeted by Reuters as being on the shortlist and mentioned by Kara Swisher as the only real contender other than Levinsohn. That wouldn’t be surprising. Kilar has been a natural on many CEO search committee lists and he has a reputation as someone who can lead a product-driven company. Kara paints it as a media vs. product decision for the board. Given her track record on Yahoo personnel moves, it can’t be ignored, but a source tells paidContent he’s not in the mix.

The flurry of reports makes sense in terms of timing. Yahoo’s annual meeting is next Thursday. It’s the first for the compromise board formed with Dan Loeb, the activist shareholder who outed Thompson’s lack of a computer science degree and lobbied hard for a board makeover. Thompson’s resume was the wedge he needed to get himself and two others on the board.

Does Yahoo need someone like Kilar, who would be starting from scratch, more than someone like Levinsohn who is well into the Yahoo learning curve after nearly two years and has a strong digital media background as well as relationships with the key content and advertising players?

The theory behind hiring Bartz and Thompson was they could hire people to lead media — Levinsohn was hired by Bartz — but their tech/business backgrounds made them better suited for the job. Bartz was CEO of AutoDesk; Thompson was president of eBay’s PayPal unit and brought a strong background in ecommerce.

Kilar’s allure, in addition to his product props, is that he has been running a media company for several years now. He gets a bonus making it through those years with a board full of strong-minded senior media execs from Hulu’s equity partners News Corp., Disney and, until the Comcast deal, NBC Universal. He made it through the loss of the initial backers inside those companies, too.

Some people I know have been waiting for him to jump ship for so long that every day could be “Jason is leaving” day. Eventually, they will be right. Others point out that Kilar started with a massive advantage in Hulu’s access to prime-time shows from three of the four majors and deals for distribution. He didn’t have to contend with an existing portal that has nearly 700 million global unique users and years of product.

Timing and momentum

However attractive other candidates might seem, the real decision here may well be one of timing and momentum. Choosing anyone from outside means Yahoo will be starting over. Again. Unless somehow the board hires someone willing to go by another exec’s blueprint, that’s at minimum a three-month process and longer for execution. A company with two CEOs and two interim CEOs in three-plus years can’t afford to start from scratch. (That’s one reason Rob Glaser is back as interim CEO at RealNetworks; as the founder and chairman who never really left, he can step right in).

Levinsohn has supporters on the board; maybe it’s just that no-one wants to be thought of as anything less than thorough at this point. Levinsohn, chosen by Rupert Murdoch to form Fox Interactive Media, made a splash by buying MySpace, IGN and other properties, then got dinged by some as not being an operator. The interim role gives the board a chance to see him operating at that level, a kind of audition, and to get a little distance between the recent unpleasantness and a full appointment. In the meantime, he’s been relatively quiet in public, although he led Yahoo’s delegation to Cannes, where he appeared on stage.

Sometimes interim equals caretaker. Sometimes, it can’t. CFO Tim Morse acted in that regard as interim CEO between Bartz and Thompson. When Levinsohn got the interim nod, I suggested it was a choice between business-as-usual and moving forward but that the board made a mistake by not going all the way:

Starting another CEO hunt at this point when you have a qualified in-house candidate just prolongs the drama and raises another series of questions when the focus should be on answers.

Wait too much longer to make a choice, send out too many vibes you might not stick with the leader you have, and you risk that momentum.

Sometimes “interim” is a solution; sometimes it’s the problem.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Kilar: More reason for Hulu to exist now than ever

Ryan Lawler — Tue, 31 Jan 2012 17:35:16 +0000

Hulu has seen a massive change in the media ecosystem since it was first announced as a joint venture between Fox and NBC Universal. But while the company was formed primarily as a way for content owners to distribute and monetize content online that would otherwise be pirated, Hulu CEO Jason Kilar said that there’s more reason for Hulu to exist now than there was four-and-a-half years ago.

At the D:Dive Into Media conference on Tuesday, Kilar highlighted that the company’s content offering is much bigger today than it’s ever been, with more than 330 content partners, not just the three (Fox, NBC and Disney) that hold an ownership stake. He said there’s more content for users, more users and a lot more usage of the site now than at launch.

But while that growth could be seen as a positive for the industry, there’s been some worry that services like Hulu, Netflix and others could eventually eat into existing business models. In response, Kilar likened the onset of Internet video to the invention of TV. When movie studios first looked at that new invention, there was some fear that TV could be a potential threat to their existing business models. And yet, TV created a huge amount of value for the industry.

In the same way, while Internet video is seen as a potentially cannibalizing force to existing models, Kilar theorized that it would grow to become a huge opportunity for Hollywood as time goes on. The important thing is that those media companies should not be blind to consumer behavior and demand as it evolves. “You need to balance that existing business while also planting seeds that can bear fruit as time goes on,” he said.

He also had a very positive view of the online video ecosystem beyond just his own business. “There’s going to be many winners in this space in the next 10 to 15 years,” he said.

Some other takeaways from his interview:

Kilar said that the $420 million in revenue that Hulu announced at the end of 2011 was not a revenue miss. He said the board plan for the year was for $408 million, but in the first half of the year the company was pacing well above that, which led to the forecast that Hulu could near $500 million for the year. But in the third quarter the ad market softened and pricing changed.
Hulu expects to spend $500 million on content next year, but won’t need to raise additional capital to pay for it, Kilar confirmed.
When discussing the various online, mobile and other connected device rights that Hulu and others need to secure, he said it wouldn’t be surprising for our grandkids to look back and chuckle about how a laptop with keys is seen as different from a mobile phone, which is different than a tablet.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Hulu in ’11: $420MM revenue, 1.5M paying subscribers

Janko Roettgers — Thu, 12 Jan 2012 22:17:20 +0000

Hulu made $420 million in revenue in 2011, CEO Jason Kilar announced on the company’s blog on Thursday afternoon. Hulu now also has more than 1.5 million Hulu Plus subscribers, and Kilar reiterated his projection that Hulu Plus will be responsible for more than half of the company’s revenue later this year.

Some other metrics shared by Kilar include:

Hulu grew its content catalog 40 percent in 2011, compared to 2010.
The content on Hulu Plus even grew by 105 percent.
Hulu Plus is now available on an aggregate install base of 200 million devices, including game consoles, mobile phones, tablets and connected TVs as well as media streamers.
Hulu has had more than 1000 brand advertisers since its launch.
Hulu will invest around $500 million in content in 2012.

Kilar also took a shot against Netflix without mentioning the service by name by suggesting that rights holders fare better when signing up with his company than with Netflix:

Our dual revenue stream Hulu Plus business model enables us to compensate content owners much more than anyone else in the online subscription market on a per subscriber basis. At scale, our model allows us to profitably pay content owners approximately 50 percent more in content licensing fees per subscriber when compared to other similarly priced online subscription services.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.