Hulu Upping Content Rights Portfolio

9 Oct, 2017 By: Erik Gruenwedel

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Hulu, perennial SVOD podium runner-up to Netflix and Amazon Prime Video, continues to swing for the fences securing marquee content rights, talent and industry awards.

Last month, Hulu announced Oscar-winning actor Sean Penn had been cast in original series “The First,” from Beau Willimon, who caught lightning creating Netflix's award-winning series “House of Cards.”

The premiere season of Hulu's “The Handmaid’s Tale” became the first SVOD-exclusive series to win a best drama series Emmy — a feat not (yet) accomplished by Netflix or Amazon.

A week before its primetime return to NBC, all 194 episodes of Emmy-winning sitcom “Will & Grace” were made available on Hulu, in an agreement that includes new episodes one week after their national broadcast.

Over the summer, 20th Century Fox Television Distribution made 3,000 episodes of Fox shows available to the streaming video service, including critically-acclaimed “This Is Us.”

A new report suggests Hulu is besting Netflix for content the SVOD pioneer previously had all to itself due to a growing moxie. 

“After years of licensing films and shows to Netflix to replace their own sagging DVD sales, [Hulu corporate] owners Walt Disney Co., Comcast, Fox and Time Warner are giving Hulu the support it needs to be a vigorous competitor,” read the report.

Of course that support actually became a mandate of sorts three years ago when then 21st Century Fox CEO Rupert Murdoch told a media confab in Laguna Beach, Calif., Netflix and Amazon Prime Video needed to be countered.

“As an industry, we need a competitor, a serious competitor to Netflix and Amazon,” Murdoch said.

In May, Hulu hired Joel Stillerman to the new position of chief content officer, reporting directly to CEO Mike Hopkins. Stillerman most recently held a similar position with AMC Networks, where he was responsible for launching pay-TV hits “The Walking Dead” and “Better Call Saul,” among others.

Some analysts disagree Hulu is elbowing Netflix. They argue the SVOD goliath’s content obligations have ballooned to $16 billion, with annual spending on original content to reach $7 billion in 2018. Hulu is spending $2.5 billion this year.

HBO CEO Richard Plepler is already on record saying the Time Warner-owned premium channel has no desire to enter into a spending war with Netflix.

MKM Partners analyst Rob Sanderson contends Netflix’s deep pockets and industry status make it impossible to ignore by content holders.

“There will likely be instances where some content is used strategically to advance a parent-level strategy (like a direct-to-consumer OTT service), but we do not think this will be systemic. Downstream parties would have to agree and this will be a piecemeal negotiation in most cases,” Sanderson wrote in a note.

Indeed, with Netflix raising subscription prices, investors cheered, sending the service’s stock to a record high valuation. And with that increased valuation comes a bigger wallet.

“We think [SVOD] platforms that are scaling up are positioned to provide increasing value, while those in decline will grow less relevant. There are many more sources and avenues to acquire licensed content than many investors recognize. The view that [four-to-five] large conglomerates control the vast majority of filmed content through their studios is not correct.”

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