Television, Video

Jason Kilar’s Terrific Post about Video Economics

Anyone interested in the economics of television and online video, and the future thereof, should go read Jason Kilar’s excellent post up on the Hulu blog right now.

There is a lot of speculation about what Kilar is really saying, but this part of the post leapt out at me:

The opportunity for content owners.

We believe content owners are in a strong position to make higher returns from TV content distribution in the future than they have historically. If studios and networks license their content to distributors with per-user per-month economics as the model (as opposed to a fixed fee model), then they will be able to extract a higher portion of the total economics their content will generate. We state this given our belief that the majority of the US population (and a material percent of the globe) will be subscribers to some flavor of digital premium content service going forward. We also believe that any number of digital distribution companies have the ability to quickly get to scale; getting to scale is not the hard part about this business. Over the past 4 years, studios and networks have not always insisted on per-user per-month economics in their digital licensing agreements, which has resulted in a regretted under-pricing of their content to digital distributors. That said, we believe that all studios and networks will recognize that it is in their economic interest to insist on per-user per-month pricing in all their distribution relationships (library content and current content).

The added emphasis at the end is mine. In case you missed it, pretty clear that that’s a plea for his partners not to do deals with Netflix… Of the articles I’ve seen, only Ryan Lawler @gigaom seemed to pick up on this. Ryan read it as cheapness — a desire by Hulu not to pay up front fees.

I read it as fear.




One thought on “Jason Kilar’s Terrific Post about Video Economics

  1. Pingback: Rewind: On Netflix, Hulu and Kilar Bold Moves – MHALLVILLE

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