Hulu Giving Its Media Conglomerate Owners a Headache

The Hulu.com numbers in today’s LA Times piece by Dawn C. Chmielewski and Meg James are pretty staggering: 27 million unique visitors per month, expected 2011 revenues of $500 million.

But that’s a pittance compared to what the service’s owners – Walt Disney Co., News Corp., and NBC Universal – make annually from cable and satellite TV subscription models. This big three’s concerns about the erosion of their traditional business model has led to a tug-of-war with Hulu CEO Jason Kilar, a high-flyer recruited from Amazon.com:

Kilar has proposed a restructuring that would give him greater autonomy, according to people familiar with the situation, who were not authorized to speak publicly about it.

According to these people, Kilar has been resisting efforts by Hulu’s owners to institute fundamental changes, such as squeezing in additional commercials. A large part of Hulu’s appeal has been its modest reliance upon commercials–only 3 1/2 minutes in a half-hour prime-time show, compared with eight minutes on TV.

Hulu says its premium $7.99 monthly plan launched in 2010 (pictured) is on target to reach a million subscribers by the end of the year. But because the big three’s TV programming licensing deals with Hulu are set to start expiring this summer, they may yet get to tell Kilar what to do.

[Read the full LA Times piece here]

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