Sadly, as with most of the digital economy, it's far too easy to see what Brian Roberts, CEO at Comcast, or Bob Iger over at Disney stew over about Hulu. Yes, the firm has 350 content vendors. But assuming the $420 million a year in sales is correct, that works out to just $1.2 million in revenue per vendor. That's not per show or per series or per franchise. That is per company ... per year! Compare that with the $3.5 million Chris McCloskey, a spokesman for NBC, told Bloomberg his company charged for a single 30-second commercial during last year's Super Bowl.
Even more bizarre, Kilar has Hulu on track to only make things Coyote Ugly for its backers. At issue is so-called "cord-cutting." That's what the Pew Charitable Trust calls the process of multichannel TV subscribers -- that's Comcast's customers -- abandoning pricey pay-TV services in favor of lower-cost Web options such as Hulu. So yes, Hulu's paid subs are growing at warp speed, but these customers are coming directly at the cost of lucrative subscribers from established media companies such as News Corp, Disney and Comcast. All Kilar is doing, therefore, is turning a high-end, high-margin cable subscriber into a low-end, low-margin Hulu subscriber. Which leaves Hulu's backers in one serious stew: Somehow they must extract what little value there is in Hulu, but do it in a way that does minimal damage to their established businesses. And this Houdini trick must get pulled off in a brutal race-to-the-bottom digital content slum that's sinking similar content plays including Netflix ( NFLX) and YouTube ( GOOG). According to the company, there is no actual definition for the word Hulu. My vote therefore is "There will be blood."