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Hulu Possibly Facing Huge Changes After Networks Alter Content Deals

Knowliz, Flickr

If you’re a user of the video streaming service Hulu, you might be in for some changes. And in this case, change isn’t always a good thing.

Providence Equity Partners, one of the owners of Hulu, is being bought out, leaving the popular video streaming service in the hands of media conglomerates Comcast (NBC), News Corp, (FOX) and Disney. (ABC) And according to the memo, the changes these guys have in store could spell disaster for Hulu.

Providence’s exit will consolidate power among Hulu’s remaining owners, who are poised to make many changes to the content deals in place with Hulu for programming from their broadcast and cable networks. The memo outlines amendments including:

• No more exclusivity for current-season content once restricted to Hulu and the networks’ respective websites. Now Disney and News Corp. can turn around and license programming to another third-party, i.e. YouTube, which could dilute Hulu’s competitive advantage in the marketplace.

• No more content parity. ABC.com and Fox.com will be able to hold back certain content to differentiate their own sites from Hulu, which was once entitled to everything on the networks’ sites.

• Exclusive “super-distribution” rights Hulu once retained to syndicate content to third-party sites like Yahoo and AOL would revert back to Disney and News Corp.

• Fox wants to increase to four ads per commercial pod on Hulu.com.

Right now, these are just speculative changes. Nothing has been set in stone as of yet. But if these changes did go into effect, it would be catastrophic for Hulu. Not only would Hulu be losing it’s “exclusive” content, but the content it already has can be chopped up and parred back to draw a bigger audience to the network sites instead. (which makes perfect sense when you think about it…) And when compared to the likes of Netflix and Amazon, I’m just not confident that Hulu can compete, especially with this new set of “rules” holding them back.

It may not be the end of Hulu per say, but it will definitely be a crippling blow.

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