New York – The management of video portal Hulu and its
corporate owners — NBC Universal (NYSE: GE), News Corp. (NYSE: NWS) and Disney (NYSE: DIS) — are reportedly at
odds over the current service, and contemplating a new "online cable
operator" business model, according to The Wall Street Journal. Networks
have complained that Hulu’s free, ad-supported service is draining ad revenue
from their own network websites, and News Corp. and Disney are considering
pulling some free content from Hulu — or else delaying availability until two
weeks or more after broadcast — sources told The Journal.
unclear what the business model is [for Hulu]," Bruce Rosenblum, head of
the television unit at Warner Bros. (NYSE: TWX), told The Journal.
"At some point, if
enough people turn off cable, then you’ve got a complete disruption of the
The company recently debuted a new subscription-based
offering, Hulu Plus.
The Journal cites sources who say Hulu CEO Jason Kilar
reportedly threatened to quit if the owners didn’t heed his recommendation to
drop the price of Hulu Plus from $9.99 to $4.99 — to match the price of
Netflix’s (NASD: NFLX) similar video streaming service.
A compromise of $7.99 was eventually
The company’s corporate owners are now reportedly considering
management’s plan to mold Hulu into a "virtual cable operator," which
"would use the Web to send live TV channels and video-on-demand content to
Last summer, Hulu explored but eventually tabled the idea of
an IPO; CEO Kilar is now reportedly seeking new capital elsewhere, including
from the company’s broadcast owners.