Steven Levitan, executive producer of ABC (s DIS) hit show Modern Family, has a Hulu problem. The problem, as he sees it, is that if Hulu goes public — which could happen as soon as the end of this year — content providers will be left in the lurch.
A series of tweets by Levitan late last night expressed the producer’s frustration with Hulu and the ratings and measurement system for shows as they’re aired on TV and viewed through ad-supported sites online, on DVR and on electronic sell-through platforms like iTunes. The first, posted at 10:22 p.m., was related to reports that online video site Hulu, which makes broadcast shows like Modern Family available for free online, is seeking a $2 billion IPO. He wrote:
“Some estimate Hulu IPO could bring in $2Bil. What will the content providers get? Zero. What is Hulu without content? An empty jukebox.”
While content creators — producers, writers, actors, etc. — wouldn’t be compensated directly from a Hulu IPO, the broadcasters that distribute the shows on Hulu would benefit from their own financial stake in the company. ABC parent Disney, NBC (s GE) and Fox (s NWS) all have an ownership stake in Hulu, along with financial backer Providence Equity Partners.
“To be clear, I value every single one of our viewers, no matter how you watch, I just want you to be counted…
…That’s how we’ll ensure the future of quality television.
We need a ratings system that counts all viewers on every format: TV, DVR, Hulu, iTunes, iPad Player, network websites, etc.”
This isn’t the first time Levitan has lamented Hulu’s effect on broadcast ratings. In June, the Modern Family creator questioned the wisdom of putting broadcast TV shows online for free at AllThingsD’s D8 conference. And earlier this month, he even suggested that ABC pull Modern Family from Hulu as a test case to see how it would affect the show’s broadcast numbers.
The big problem is that the networks can’t monetize their online content as well as they can linear broadcast TV. And while ABC and other networks are dramatically increasing the ad loads associated with online content, the revenue they can expect from online viewing still pales in comparison to TV ad spending. In the near term, that’s going to cause people like Levitan — and others — to continue questioning whether or not their shows should be free online. In the long term, however, it seems the move toward on-demand access of content — whether it be on TV, online or on mobile devices — is a trend that’s bound to continue.
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