NEW YORK ( TheStreet) -- I must preface this article by saying, the following rumor comes from the NY Post.
That said, the newspaper has been right before. Even if they're not, the report the newspaper published over the weekend holds considerable meaning for investors in and observers of the media space.
The Post claims that Hulu plans to shift to a model where subscribers to the online streaming service must prove that they also subscribe to pay-cable or satellite television. According to the report, this is one factor that led to Providence Equity Partners' decision to sell its stake in Hulu to majority owners News Corp. (NWSA), Disney (DIS - Get Report) and Comcast (CMCSA - Get Report).
If this happens, it only cements my contention that content owners call the shots, leaving middlemen such as Netflix (NFLX - Get Report) flapping in the breeze. Just the threat of it happening is enough to let Netflix and even Apple (AAPL), who reportedly has streaming content ambitions, know who is boss.
Instead of understanding what that convergence meant for the economics of old and new industries and what regulations might be needed to avoid protectionist behavior by pay TV providers and broadcasters,Couple this with recent TV Everywhere deals between companies like Disney and Comcast and reports of more to come (the Post says Fox is in talks with Comcast on a similar deal) and the future looks bleak for Netflix as well as consumers who would like to cut the cord and still watch quality programming. Bottom line, the old guard is just not going to give you premium programming for the cost of a standalone streaming subscription.
a recent Senate hearing dealtmore with discussions around reworking the Telecommunications Act of 1996 for the current era.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts