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Hulu: The Missed Opportunity to Crush Netflix and Transform the Cable Model

NEW YORK ( TheStreet) -- Before you flame me, I recognize that several layers of crap keep individuals and companies from making bold, common sense or "right" moves across spaces, particularly in the media. At least that's the going excuse. It will never happen because ...

For example, in social media, there's no question: Twitter (Proposed Ticker: TWIT) and Facebook ( FB - Get Report ) should merge. But ego and hipster/engineering-geek (strange mix, I know) posturing keeps that from even making the radar.

In the new media vs. old guard media's sort-of-on, sort-of-off relationship, you hear loads of It will never happen because ...

Believe me, I understand this. I can get with the walled garden approach. Ultimately, I even advocate Time Warner's ( TWX - Get Report ) approach to disseminating its content over Disney's (DIS - Get Report), at least insofar as the latter's recent deal with Netflix (NFLX - Get Report) is concerned.

But, why even give Netflix the time of day to begin with? I'll never understand that. If I own the key content, I do one of two things:

One, I continue along with the disparate offerings. HBO GO here and WatchESPN there. You know -- the idea of TV Everywhere where content providers create their own Web platforms and distribute the content to pay-TV subscribers and/or viewers who subscribe to the standalone digital service. The former is, at the moment, much more common.

Two, I monitor the heck out of consumer behavior and, if I give anything up to a "third party," I give it up to Hulu. Forget Netflix. Even forget Amazon.com (AMZN).

Near term you will not collect the type of icing-on-the-cake revenue Disney just extracted from Netflix or CBS (CBS) brags about generating via licensing deals on its quarterly conference calls, but long term, you're building a healthier, less messy industry.

CBS executives sound smart today by picking up money that's right in front of them, but it's short-sighted and dangerous. They're hurting their company. They're hurting Netflix. And they're hurting the business. It's akin to taking your turn with the loose high school cheerleader. Immediate payoff, but nobody wins in the end.

Forgo instant gratification for a clean, safe and thriving old guard media turned new media powerhouse later.
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