This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

If Netflix Mattered, Hulu Would Put It Out of Business

Stocks in this article: NFLXAMZNFOXDISCMCSAAMCXTWXCBS

At this stage, Hulu only competes with Netflix insofar as the "competition" helps Reed Hastings and Ted Sarandos dig their own graves. Until Netflix can secure a meaningful amount of first-run programming, live events and original programming on par with what AMC Networks (AMCX) puts out (forget comparisons to Time Warner's (TWX) HBO as they're patently absurd), they're not even competition. Hulu's owners can toy with Netflix by inflating the market price of programming and making other similar strategic moves.

And, let's face it, if that scrap-heap programming Netflix and Amazon bid on had any value the original rights holders would keep it for themselves (see, e.g., HBO's smart insistence on true exclusivity) or license it to their friends. Call it collusion but, if a piece of programming really matters and, for some reason, a big media entity doesn't want to keep it in-house, it's selling to friendly combatants. Keeping it in the clique. Deals like the one Netflix cut with Disney -- which are likely not as good as advertised -- are few and far between.

At this point, the old guard media has no reason to blow up its cush model of collecting fees from cable and satellite companies for subscribers. They control the pace of the metamorphosis to a world where we consume all of our content via an Internet connection and without the need for a traditional subscription. Because of big media's foothold on the most prime programming (live events, first-run TV, appointment viewing, etc.), it has no reason or incentive to blow up its own model before it feels the need. A gradual transition works much better. And it's exactly what we'll see.

Hulu could "unfragment" disparate TV Everywhere offerings in a heartbeat. All it would take are the nation's biggest media executives flipping enough switches to make it happen at a meaningful scale. But they will not. Right now, they'll stick with what's safe -- collecting Netflix's checks (the revenue has become a drug to guys like Les Moonves at CBS (CBS)) and sending authenticated feeds to any platform viewers wish to use from mobile devices to a Roku Player or Apple (AAPL) TV.

There's just no reason to do anything with Hulu right now other than keep it on the periphery and let the media perpetuate the dual myths that it's competing with a relevant Netflix.

-- 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.
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,814.94 -2.96 -0.02%
S&P 500 2,067.03 -2.38 -0.12%
NASDAQ 4,758.2520 +3.36 0.07%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs