If Netflix Mattered, Hulu Would Put It Out of Business

NEW YORK ( TheStreet) -- As I read reaction to the dead-again Hulu deal, practically every point that gets made misses the larger, more meaningful one.

For instance, it strikes me kinda funny -- and should strike you the same -- when Peter Kafka at All Things D contends that Hulu's "new plan" is to compete with Netflix ( NFLX) and Amazon.com ( AMZN) before asking, with a sort of blissful ignorance, how the company plans to pay for it. Kafka claims to have a source -- he defines it as "someone who knows" -- but this person absolutely cannot be high-level. If they are, he's only getting the basic information he reports, but, clearly, very little to inform his understanding of the situation.

There's a major misconception about how big media television executives view Netflix. They do not view it as a threat. Because, if they did, they would turn Hulu into the ideal one-stop shop for all content -- nostalgia, catch-up programming and first-run/live television -- tomorrow. Such a move, even if only slightly less halfhearted than it already is, would put an almost-instant kibosh on Netflix.

Recall who owns and controls Hulu: A consortium of Twenty-First Century Fox ( FOX), Disney ( DIS) and NBC Universal, a division of Comcast ( CMCSA).

These guys could unleash an all-out assault that would put Netflix out of business in an instant. But that would be a kamikaze move that should not happen and does not have to happen anytime soon. There's no need, given the reality that Netflix has little, if any, material impact on the big media establishment, particularly the major content producers. These guys continue to deliver numbers -- ratings and revenue -- hand over fist.

Tech guys like Kafka and media critics such as Bryan Stelter at The New York Times eat up talking points such as Hulu will invest to compete with Netflix or Disney CEO Robert Iger's quotable: The future of Hulu is bright, and if the future of Hulu is bright, then we should hold onto it.

We should stop calling folks who produce this type of story "reporters"; they're "regurgitators."

There's only a shred of truth at the surface of the Hulu will compete with Netflix and Hulu has a bright future talking points.

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