Will Obama Keep Hulu Free?


Hulu clocked more than a billion video views in December, according to comScore (s SCOR) data reported by USA Today this morning. The paper took this as an opportunity to look into Hulu’s future plans for premium pricing, but Hulu CEO Jason Kilar kept his lips shut (as usual). Kilar would say only that he has never ruled out a paid model, but the paper also quotes Forrester Research analyst James McQuivey betting that Hulu would have already moved forward with premium plans if it weren’t for the proposed Comcast/NBCU (s CMCSA) (s ge) merger.

Indeed, the wedding between the cable and the content giant has fallen under increased scrutiny from Democratic lawmakers. Is it possible that we have the Obama administration to thank for keeping Hulu free for now?

It’s no secret that Obama’s team has been more critical towards big corporate mergers than the previous administration. In fact, the House Energy & Commerce Committee’s Communications & Internet Subcommittee is scheduled to take a close look at the merger between Comcast and NBC today. A Committee memo set the tone by describing the two company’s position in the media marketplace as “unique and commanding,” according to paidContent, adding that this position could “fundamentally shape the way Web video evolves.”

The Senate has its own hearing scheduled for Thursday, when Colleen Abdoulah, president of the Denver-based cable company Wow! plans to tell the senators that the deal could threaten “competition in the traditional and the rapidly evolving Internet content and distribution areas,” according a Reuters. NBC Universal President Jeff Zucker and Comcast Chairman and CEO Brian Roberts are expected to take the stand to defend the merger.

Comcast and NBC have tried to assure lawmakers and customers alike that they’re not trying to kill off Hulu in favor of their own subscription-based TV Everywhere efforts. It’s entirely possible that the two companies will have to come up with more than a promise to do as much. Any move to put up a pay wall around Hulu content right now could seriously hurt the argument that the marketplace would leave enough room for ad-based online video models even after the merger.

Granted, NBC only owns 27 32 percent of Hulu, and the other two stake holders Fox and Disney have been pushing towards paid subscriptions as well. However, all the attention that the Comcast/NBCU merger is getting could force their fellow stake holders to wait as well. Comcast and NBC won’t just have to persuade Democratic House and Senate lawmakers. The deal will also be examined by the Department of Justice, the Federal Trade Commission and the Federal Communications Commission.

FCC Chairman Julius Genachowski has so far kept mum on the deal partly because the parties haven’t yet filed anything with his agency. Comcast, GE and NBCU filed a joint statement with the FCC late last week. GigaOM Pro analyst Paul Sweeting estimated in December (sub. req’d) that the deal might not close before the second half of this year, or perhaps even later. This could mean that Hulu will keep all of its content free for at least another six months.

Related GigaOM Pro Research Report: A Closer Look at Comcast’s NBC Universal Acquisition (subscription required)

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