Speaking openly about the advantages—perceived and otherwise—of his company being owned by major content providers, Hulu consumer experience chief Ben Smith described an atmosphere in which the streaming giant doesn’t have carte blanche but can try some things others cannot.
“I think we were able to start some conversations faster,” Smith told FierceOnlineVideo. “The heads of [Hulu’s corporate co-owners] ABC and Fox are on our board of directors, so it’s short walks to start the conversation.”
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The subject of Hulu’s ownership has come under scrutiny in the pay-TV industry now that Hulu, which is jointly owned by Disney-ABC, 21st Century Fox, Comcast-NBCU and Time Warner Inc., has launched a virtual MVPD service, with operators concerned that the cozy in-house relationship Hulu enjoys with programming giants gives it an inherent leg up.
Walking a fine line, Smith said there’s limitations to that end.
“These are publicly traded companies that have to answer to shareholders,” he said. “Their mission isn’t just to make Hulu great. I don’t know that we have a tremendous amount more slack. It’s just that we have shorter walks—and perhaps more patience—to start digital conversations.”
Speaking to Cablefax, Smith’s colleague Tim Connolly, Hulu’s senior VP and head of distribution and partnerships, conceded that the live service is raising concerns among cable, satellite and telco TV operators.
“Cable operators were saying, ‘You guys now offer a competing service, and I’m a little worried about having your SVOD business. Are you going to target and try to poach my subscribers?’” Connolly said.
Cablefax also quoted Mediacom marketing senior VP David McNaughton, who said cable operators are comfortable with vMPVD services like Hulu Live, as long as they serve a complementary niche.
“I’d rather have them buying my skinnier bundle, in which my dollar margin is pretty similar to the big bundle, and if they want to add Sling TV to it and pay someone else instead of us for that extra $20, that doesn’t hurt me that much,” he said.
“I’d rather get as much of the wallet as I can, but since the margin on the extra programming on television is relatively slim, I don’t really care that much,” McNaughton added.