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

All individual programming that goes digital should go digital through Hulu. And the now-disparate TV Everywhere offerings should come as a la carte options on Hulu. Give the customer the ability to pick and choose, spend less than $100 a month to get everything they want, excluding sports season packages and cut the cord, without regret, if that's their inclination.

Tell Netflix to take a hike when it says it should be an a la carte offering. That's a bogus smoke-and-mirrors proposition by Reed Hastings until he directly owns enough original content to put forth a worthy platform.

Not everybody will cut the cord. So, while my approach busts open the cable/satellite model, the content owners still have leverage and will collect massive fees per subscriber. Those who cut the cord will use Hulu as the one-stop shop for practically all content.

Subscription and advertising sales drive revenue and profits in this partnership. Netflix goes by the wayside and Amazon and other middlemen must completely rethink and abandon their approaches to digital video content.

I have been playing around with Hulu Plus lately. It's excellent. Remember, it's a joint venture between Disney, Comcast's (CMCSA) NBCUniversal and News Corp's (NWSA) Fox. Because of this you get fresh programming. Last night I could have watched the latest episodes of everything from Saturday Night Live and Jimmy Fallon to the premiere of 1600 Penn.

Hulu needs to give the consumer access to just about everything.

Let subscribers cobble together a monthly digital subscription:

  • Basic package: FREE
  • Hulu Plus: $7.99
  • HBO GO: $19.99
  • WatchESPN: $19.99
  • A bundle of Discovery Communications (DISCA) and/or Scripps Networks Interactive (SNI) programming: $14.99 apiece.
  • And then yearly subscriptions to packages such as NFL Sunday Ticket and NHL Centre Ice if the NHL ever comes back!
  • That's just back of the envelope stuff there, but if it's not the future, it should be. That's what people are willing to pay for -- exactly what they want and how they want it through one central distribution platform.

    The old guard media -- and all content owners -- need to get on board with Hulu and drive it like they stole as the future of this mega-billion dollar industry.

    Netflix will go out of business. Because, if you really think about it, it's the short-sighted decisions of content providers that permit Netflix to exist anyway. I'm bullish NFLX to a moderate extent because of today's reality. The old guard has the ability to -- and would be stupid not to -- completely alter the way things are.

    It would take them less than a week of not-so-intense negotiations. If Obama and Boehner can do it, cats like Rupert Murdoch, Jeff Bewkes and Les Moonves can.

    --Written by Rocco Pendola in Santa Monica, Calif.

    Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
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