Hulu CEO Jason Kilar will likely soon exit the company with a $100 million payday, according to a company memo recently obtained by Variety.
After his departure, it is strongly believed that the network’s owners will move to take away some of Hulu’s exclusivity while shifting how the online video streaming service does business.
The move to dismiss Kilar comes just ahead of Providence Equity Partners contract clause which allows the company to cash out its shares in September 2012. Hulu has nearly doubled in value from the $2 billion valuation it was given when Providence bought into the company, a pretty good sign that the company will exit with fists full of cash.
After leaving behind Hulu, the company will then be seated fully in control of News Corp., Comcast, and Disney who would likely purchase all of Providence’s Hulu shares.
Moving forward with a management buyout, Hulu executives would be able to vest a certain number of shares and cash out, hence Kilar’s $100 million exit package.
With traditional broadcasters in control of the company, major changes are expected. For example, Fox would like to see more commercials jam packed into each and every commercial break for free and Hulu Plus customers. The networks would also likely put to end exclusivity for current-season content, taking away Hulu’s big advantage over many of its competitors such as Netflix who has to wait until current seasons end to re-broadcast television shows.
With Jason Kilar no longer in the driver’s seat and Providence Equity Partners out of the picture, Hulu would also likely sell back certain content from Hulu, giving the competitive advantage to their own web portals before releasing content to Hulu.
Hulu in 2011 generated $420 million in revenue; should the company strip away the only aspects of the site that make it worthwhile, they might as well start calling it MySpace. It’s almost laughable how much News Corp. simply doesn’t understand the web space.
As a web user who has forgone cable and satellite service for Hulu, Netflix ,and other video providers, I say let the company strip away what makes them worthwhile; there are plenty of free services internet savvy users can access for all of their content desires. Should Hulu hand content over to other providers, I will of course be more than happy to simply cancel my Hulu Plus account and head over to a competitor’s platform.