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Netflix, Hulu and the golden age of content

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Hulu is launching its first scripted original series in February, and the company is already thinking about investing more in original content: Hulu Chief Content Officer Andy Forssell told Bloomberg on Sunday it might raise money this year to spend more on shows you haven’t seen on TV yet.

Hulu’s move toward original content follows similar announcements by Netflix, (s NFLX) which is going to launch its first original series this spring as well. For both companies, going into original content is in part a reaction to the threat of being locked out of deals for popular TV shows. But it’s also part of a larger movement toward a new Hollywood, where content is produced for online-only properties, money is raised differently and networks aren’t the only game in town anymore. It’s a new golden age of content, and these are its key players:

  • Netflix (s nflx) has been spending big on original content, in part to make up for losing access to movies from Starz, (s lstza)  in part to bolster its international expansion: You don’t have to renegotiate deals in every single country if you own a show outright. Subscribers will have a first chance to check out original Netflix fare on Feb. 6, when Lilyhammer, a show starring Steven van Zandt as a New York mobster in witness protection in Norway, debuts on the service. Netflix will also debut the Kevin Spacey series House of Cards later this year, and bring back Arrested Development early next year.
  • Hulu’s first scripted original, titled Battleground, will debut on Feb. 15. The show is a timely dramatization of the primary race, and it’s not Hulu’s only stint in original programming. The company also ordered another season of Morgan Spurlock’s documentary series A Day in the Life, and a six-part documentary miniseries from star director Richard Linklater. Previously, Hulu had the exclusive rights to the reality show If I Can Dream in 2010. Hulu’s CEO Jason Kilar recently announced that he intends to spend $500 million on content this year.
  • YouTube has been investing big in original content and is in the process of rolling out around 100 new channels from Hollywood A-list celebs and YouTube stars alike, including contributions from Madonna, Rainn Wilson and Ashton Kutcher. The Google-owned (s GOOG) video site is paying its new high-profile talent advances against ad revenue, and experienced YouTubers have been able to make six-figure income through the site for some time. And YouTube is not alone with its focus on A-list web content; both Yahoo (s YHOO) and AOL (s AOL) are investing heavily in web series.
  • Kickstarter. The crowd-funding site, as well as its competitor IndieGoGo are increasingly playing a role in the financing of movies and web series – and it certainly helps that even Hollywood’s rich and famous are turning to the site. One example: Colin Hanks raised $92,000 last summer to finance the making of a documentary about Tower Records.
  • Amazon Studios is at the forefront of another funding game changer: The Amazon (s AMZN) venture, and others like, are using crowdsourcing techniques as well as experienced Hollywood to decide who should get funding. Amazon Studios paid $580,000 to script writers and $2.1 million for test movies in 2011.
  • BitTorrent. Consumers may be flocking to streaming services like Netflix, but don’t rule out the power of file sharing just yet. BitTorrent Inc. announced recently that it has 150 million active users a month, and the company has been utilizing this giant user base to raise awareness as well as money for film makers as well. At the helm of these efforts is, which has raised close to $90,000 for the P2P-exclusive TV show Pioneer One alone.

Taken by itself, any of these efforts may be dwarfed by the budgets established cable networks like HBO (s twx) spend on original content. But combined, they’re beginning to represent a power shift towards online-exclusive distribution.

And there’s something else going on here that’s even more profound: Previously, web series and the occasional YouTube short used to be about getting discovered by Hollywood and eventually having your show picked up by TV networks. These days, YouTube itself is becoming a way to make money; Kickstarter and Amazon are becoming options to raise more money; and eventually Netflix, and not TV, may be the big break. Benefiting from this are consumers, who are going to see a lot more shows and movies show up on a lot more screens.

8 Responses to “Netflix, Hulu and the golden age of content”

  1. TimeKeeper

    Content production introduces a huge amount of risk, requires a whole new corporate infrastructure and lots of variable costs. Netflix, Hulu, et al… have been enjoying the fruits of other’s labor by just acquiring rights to and broadcasting completed properties. By funding original content they run the risk of having bomb on their hands. Sure they have the venue but if they cannot find an audience how are they going to monetize it?

    The other issue they have is that they will still have to pay for other content that they do not produce. Original content does not reduce their dependance on other producers/distributors for content to fill out their library. A crazy thing occurs if they do have a hit; it may take audience away from 3rd part content they paid to acquire streaming rights. So they are paying for something that their audience is not watching in order to offer a large library.

    This will be interesting to follow and see if it turns out to be a good move or a wild tangent that costs these big guys their companies.

  2. @cardinalrose

    It is worth noting that they are all following the HBO model. You should probably add Starz to your list. They dropped Netflix but they are also focused on following the HBO model (their CEO he was former HBO CEO) and they are in the midst of rolling out their own original programming. I think their rollout started 3 years ago with Spartacus and they are up to about 4 original shows with more to come. I think their latest and greatest is Boss staring Kelsey Grammar.

  3. Shayn Baron

    I see a bunch of new faces.. I hope we get real actors here (not the typical web standard). This is an Epic deal and should be presented with quality. I’m excited!