Huffpost Entertainment

Hulu Memo Leaked: CEO Jason Kilar Could Leave, Along With Lots Of Content, 'Variety' Reports

Posted: Updated:

Is Hulu really dying? It might seem that way in reading today's tech and entertainment news.

The hullaballoo began when Variety published a summary of a leaked internal memo outlining the potential fallout from Hulu investor Providence Capital's upcoming sale of its 10 percent stake in the company.

The memo, as interpreted by Variety's Andrew Wallenstein, indicates that Hulu's star CEO Jason Kilar could leave after selling his share in the company, which is valued at $100 million. Other top executives could follow Kilar's lead. After they leave, other Hulu stakeholders, most notably Fox parent company News Corp., could roll back the rights it grants Hulu to its content.

Media outlets such as PCWorld and Gizmodo wrote on the potential impact of the memo, which no one outside Hulu and Variety has yet seen in full. They argued that the changes it implied were likely to spell the end of Hulu as we know it. Buzzfeed even called it "the Hulu death memo."

While the memo is disconcerting and Kilar's departure would be a hit to the company, rumors of Hulu's death may be greatly exaggerated.

First, the memo doesn't reveal the company's plans, or even those of its partners -- it suggests hypothetical reactions to future events. Variety's Wallenstein admits as much in his article:

The deal points specified in the memo can't be conclusively determined to be the final amendments to be implemented by Hulu's owners, though they certainly give a sense of News Corp. and Disney's intent with regards to changing their relationship with Hulu. It's also unclear whether the new deal terms would take effectively immediately.

More fundamentally, the changes implied by the memo may not be as extreme as the blogosphere believes, even if they are all eventually implemented: Fox shows might be available on Hulu a few days later than they currently are, there might be a few more commercials, and some shows currently on Hulu might also be made available on YouTube.

RBC analyst David Bank admitted that these changes could make Hulu a slightly "less valuable platform," but he told The Huffington Post that they could also end up being good for Disney and News Corp. stakeholders.

"At the end of the day, Hulu may lose some of its competitive edge in the interest of the parent companies retaining or creating value for their shows in other ways," he said.

In addition to letting the companies sell the shows to platforms like YouTube, Bank added that restricting access to the shows on Hulu could give the companies more leverage when negotiating valuable affiliate fees with cable companies. Right now, News Corp. in particular seems to fear that Hulu is drawing viewers away from cable, the fees for which translate into revenue for the networks.

Bank summarized the dispute with an analogy: "What's emerging is the resolution of the unavoidable conflict between the interests of the partners and Hulu -- the conflict between parents and their child."

Also on HuffPost:

Suggest a correction

Around the Web

Hulu Content May Change This Fall, Report Says

Hulu Aquiring Content, Subscribers Faster Than Other Video Services

What It Means To Its Partners When Hulu Explodes

Report: Leaked Memo Indicates Hulu CEO Jason Kilar May Be On His Way Out

Watch TV. Watch Movies. | Online | Free | Hulu

Report: Leaked Memo Indicates Hulu CEO Jason Kilar May Be On ...

Big shakeup coming to Hulu according to 'confidential memo' | The ...

Hulu's CEO Jason Kilar could be giving up the ship | Internet ...

Hulu CEO faces big changes - Entertainment News, Technology ...

Secret memo details Hulu 'transition plan' - FierceOnlineVideo

Big shakeup coming to Hulu according to 'confidential memo ...

Techmeme: Report: Leaked Memo Indicates Hulu CEO Jason Kilar ...

The Hulu Death Memo

Leaked Memo Indicates Hulu CEO Being Replaced | Pulse2 ...