Univision to distribute its top programs online through Hulu

For the first time, Univision will make its popular Spanish-language novelas, variety shows and reality series available online, through Internet television provider Hulu.

The deal represents a milestone for Univision, the fifth-largest television network in the U.S., whose popular programming dominates the Spanish-language market.

Starting later this year, Univision said, it will make some of its prime-time shows available on the free, ad-supported Hulu.com site a day after an episode's initial airing. A more extensive collection of the current season's shows and past series can be found on Hulu Plus, the subscription service that charges $7.99 a month.

"The deal is significant, not just for Univision and Hulu, but for individual [viewers] as well," said Tonia O'Connor, Univision Communications' president of distribution and sales. "This is the first time we are making this content available online."

Univision did not identify which of its shows it planned to offer for free online viewing, and which would require a paid subscription. Its partership with Mexico City-based television giant Grupo Televisa enables Univision to draw from a trove of low-cost Televisa-produced telenovelas, which fuel its prime-time ratings.

Last week, Univision accounted for the top 10 programs among Latino viewers, according to Nielsen ratings.

Andy Forssell, Hulu's senior vice president of content acquisition, said the partnership with Univision would enable the online video service to reach a population of 50 million Latino people in the United States -- a group advertisers are eager to reach.

"It's young, it's active, it's upwardly mobile and it's hard to get to," Forssell said. "It's exactly the audience you'd expect to be online in force, but they haven't been. There has not been any significant amount of long-form Spanish-language content online."

Forssell said the Univision deal will break down the barriers to online viewing of these shows.

Univision tapped into demand for online Spanish-language content when it streamed World Cup soccer matches in June 2010. When it allowed viewers to watch full episodes of one of its novelas, "Eva Luna," the network discovered the online offering fueled television viewing. The show's finale in April drew 9.5 million viewers, making it the highest-rated domestically produced novela in history.

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Photo: A scene from the Univision program, "Una Familia Con Suerte" -- a Fortunate Family. Credit: Univision.

 

 

Univision, which has dominated the Spanish-language market with its popular programming.

Hulu to launch in Japan

Hulu, the popular video website owned by media giants Comcast Corp., Walt Disney Co. and News Corp., is launching a subscription service in Japan.

The move is the first international expansion for Hulu, which carries a large library of popular movies and television shows. While the service will be free for one month to subscribers, after that it will be a pay service.

"We are taking a first but important step to make good on our aspiration to serve customers all over the world," said Johannes Larcher, Hulu's senior vice president of international operations.

Besides content from Disney, parent of ABC, Comcast, owner of NBCUniversal and News Corp., parent of Fox, Hulu will also offer content from CBS. This marks the first time CBS has done business with Hulu abroad or in the United States. Hulu also has deals for content to offer in Japan from Sony and Warner Bros.

Launched in 2008, Hulu's owners have been shopping the company to potential bidders. Among those that have kicked the tires are Google, Yahoo, Dish Network, DirecTV and Amazon.

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Photo: In its debut commercial, Alec Baldwin describes Hulu as "an evil plot to destroy the world." Credit: Hulu.

 

The case for holding on to Hulu

As the owners of Hulu prepare to receive initial bids Wednesday, at least one Wall Street analyst argues that it would be "a mistake of epic proportions" to dispose of the Internet television pioneer just as the service is gaining momentum.

Richard Greenfield, a media analyst with BTIG, notes that since its public launch in March 2008, Hulu is on pace to collect $500 million in revenue this year -- nearly double its 2011 take. Hulu's nearly 25 million viewers in July spent, on average, more than three hours a month watching shows. And the service delivered the highest number of online video ad impressions, according to the measurement firm ComScore.

"Media companies should be going out of their way to retain ownership of Hulu and allow it to flourish," Greenfield wrote, referring to Hulu partners News Corp., Walt Disney Co. and NBCUniversal parent Comcast Corp. "The bigger Hulu gets, the more dollars it can pay content creators on an annual basis."

Companies including Amazon.com, DirecTV, Google Inc. and Yahoo Inc. are expected to submit offers for Hulu, which could go as high as $2 billion, according to people familiar with the matter.

Earlier this month, News Corp. Chief Operating Officer Chase Carey cautioned that a sale was not a foregone conclusion. He told investors on the Aug. 10 earnings call that details were still being sorted out. 

"We'll see where it ultimately ends up," Carey said. "In the end ... does it make sense for us to stay in an ownership position and continue to have it driven by content owners?"

The service's corporate parents are determining whether to grant exclusive online rights to the prospective new owners -- and for what duration.

Hulu's media owners have long struggled with the service's success, which some see as threatening established business relationships with cable, satellite and telecommunications companies. These distributors have balked at paying for popular prime-time shows that Hulu has made available online for free a scant 24 hours after an episode's initial airing.

Greenfield wrote that the move toward so-called "authentication," in which only cable and satellite subscribers get immediate online access to current shows, "solves that problem for very recent content."

Fox last month imposed an eight-day waiting period for free online access to "Glee" and other popular shows. Only those who pay -- which for the moment are DISH subscribers -- can watch these programs online within 24 hours.

Disney Chief Executive Robert A. Iger hinted that ABC might soon follow Fox's lead during the company's recent earnings call. He said Disney would consider some form of authentication to "allow access to our programming faster or in a more aggressive window, if the customer is a multichannel subscriber.”

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Hulu announces plans to launch service in Japan

Hulu plans to expand its reach into Japan.

On Wednesday, Hulu, the popular online video site, said it would ramp up its international expansion later this year by offering a monthly subscription service in Japan. 

Hulu declined to say how much it would charge for the service, or how its program line-up might be different from its free Hulu site or its recently introduced $7.99 a month Hulu Plus subscription service available in the U.S.  Those details would be revealed closer to launch, a company spokeswoman said.

"Since the very beginning of Hulu, we have had our aspirations firmly set on serving audiences around the globe," Johannes Larcher, the company's senior vice president in charge of international, said in a company blog post.

"In Japan, we also see an unfulfilled market need with respect to premium feature film and TV content, and very favorable environmental factors to a service like ours, including extensive broadband penetration, smart phone and other internet-connected device ubiquity, and strong consumer interest," Larcher said.

Hulu also is dipping its toe into original productions. On Aug. 17,  it plans to unveil a documentary series -- exclusive to Hulu -- called "A Day in the Life" and produced by Morgan Spurlock, the filmmaker behind "Super Size Me" and "The Greatest Movie Ever Sold."

In "A Day in the Life," Spurlock spends 24 hours following interesting personalities, including British business mogul Richard Branson, rapper and songwriter will.i.am and comedian Russell Peters.

The company is hoping to make itself attractive to possible investors.  The owners of Hulu -- Walt Disney Co., News Corp., NBCUniversal and Providence Equity Partners -- are quietly shopping the 3-year-old service to strategic partners, including Amazon.com Inc., Yahoo Inc., Google Inc. and Apple Inc.

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Photo: Actor Alec Baldwin appeared in Hulu's inaugural television advertisement, in which the company called itself "an evil plot to destroy the world." Credit: Hulu

Hulu rolls out its first long-form original production

Hulu soon can add the role of "producer" to its list of credits.

The online video service is about to join an elite group of networks that produce long-form original programming. On Aug. 17, Hulu plans to unveil a documentary series -- exclusive to Hulu -- called "A Day in the Life."  The six-episode series is produced by Morgan Spurlock, the filmmaker behind "Super Size Me" and "The Greatest Movie Ever Sold."

In "A Day in the Life," Spurlock spends 24 hours following interesting personalities, including British business mogul Richard Branson, rapper and songwriter will.i.am and comedian Russell Peters.

"This is a project that we fell in love with, and we knew the audience would be there," said Andy Forssell, Hulu's senior vice president of content acquisition and distribution. Forssell noted that Spurlock's other productions have ranked among Hulu's most popular movie offerings.

Spurlock's 22-minute documentaries, which contain commercials, will be available on the free Hulu site as well as through Hulu's subscription service. 

"We want to reach as wide an audience as possible," Forssell said. 

Hulu has an undisclosed ownership interest in "A Day in the Life," which Spurlock produces through his company Warrior Poets along with his producing partner, Jeremy Chilnick. Spurlock, Chilnick and Hulu have been working on the project for six months.

Hulu's move into original productions is significant because it illustrates the company's big ambitions. 

The service -- owned by News Corp., NBCUniversal and Walt Disney Co. -- has grown rapidly by providing consumers a convenient and free venue to catch up on views of popular network hits like NBC's "The Office" and Fox's "Glee."

But along the way, Hulu has antagonized its owners' traditional programming partners: cable and satellite TV providers. These companies, which pay billions of dollars a year to carry some of the same programming that Hulu offers for free, have complained bitterly -- prompting changes.

Last week, News Corp. announced that it would begin restricting access to Fox shows, including "Glee" and "The Simpsons." Beginning Aug. 15, Fox will delay by eight days the availability of Fox shows on the free Hulu site. (Subscribers to the $7.99 a month Hulu Plus service will have more immediate access.)

The media companies also are looking to sell Hulu, providing the service with another reason to set itself apart from competing online video sites.

"A Day in the Life" is not Hulu's first original production, but it is its most ambitious. The series also launches a Hulu initiative to carve out space to showcase the work of other independent producers.

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Photo: Documentary filmmaker Morgan Spurlock. Irfan Khan / Los Angeles Times

-- Meg James

 

Fox's Web strategy aims to appease cable, satellite distributors

Fox Broadcasting has made great headway in getting pay-TV distributors such as Time Warner Cable to cough up so-called retransmission consent fees in return for carrying its programming.

Now it's payback time.

The announcement from Fox on Tuesday that it would require consumers to prove they have a subscription with a multichannel video programming distributor (MVPD) -- what we used to call cable operators -- is being done primarily to appease the folks who own the wires that pipe programming into homes. The first big MVPD to sign on with Fox is Dish Network, the satellite broadcaster with 14.2 million subscribers.

In years past, broadcasters such as Fox were not able to get cold, hard cash from distributors. Instead, they launched new cable channels and got paid for them instead. Now with Fox, CBS, ABC and NBC desperate for new revenue streams and a glut of cable channels making the need for new ones nonexistent, the broadcast networks are finally getting compensated for their content.

If the MVPDs are paying broadcasters, then it is only natural that they won't want those same broadcasters to then put that content on the Web for free. In the case of Fox's new approach, content will stay behind a pay wall for eight days after it airs on the network. After that, it will be available to all. Don't be surprised if ultimately that eight-day window goes away too.

This approach is not very different from the one distributors take with cable networks such as USA or FX, and if broadcasters want to start getting paid the same way cable networks do, then they will have to play by the same rules.

Much has been made about what Fox's strategy says about the future of Hulu, the online video site launched by Fox parent News Corp. along with Walt Disney Co. and NBCUniversal. Hulu used to give everything away for free and now is moving toward a pay model.

Hulu was developed not only to give the entertainment industry an online platform; it was also built to reduce piracy even if it meant giving it away for free.

Like Woody Allen's character in his old movie "Take the Money and Run" who keeps getting his glasses broken by bullies until he finally starts breaking them himself when confronted, the entertainment companies figured if they were going to be pirated anyway, they might as well do it themselves.

It is likely that the other broadcast networks will adopt a similar approach to what Fox is doing. Otherwise, they will have a hard time getting those big retransmission consent fees from distributors.

There is, of course, concern about content that was once free online now being available only to those who pay.

"This development is very unfortunate for consumers and ultimately will be self-destructive for the TV industry," said Gigi Sohn, president of media advocacy group Public Knowledge, who added that the move will invite "consumers to go back to stealing content."

However, there is no law that says content that is paid for on one platform must be free on another.

On top of that, Fox and the other broadcast networks are still available free to consumers who don't subscribe to an MVPD. Just make sure to watch when it is on or you will have to wait a week or so to watch it online. There are worse things in life.

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CBS, Netflix extend partnership to Canada and Latin America

Beginning in September, Netflix customers in Canada will be able to stream episodes of several CBS owned television shows including "Numb3rs," "Twin Peaks" and episodes of past seasons of "Dexter."

The two-year, nonexclusive international licensing deal -- announced Wednesday -- expands a partnership between the two companies, which was signed earlier this year. The initial agreement covered TV show streaming by Netflix users in the U.S.

Financial terms of the international deal were not disclosed.

Netflix has been bolstering its offerings to compete with rival services. On Wednesday, episodes of the critically acclaimed AMC series "Mad Men" become available to Netflix's U.S. subscribers as part of a syndication deal that the Los Gatos-based company structured with studio Lionsgate.

Netflix primarily has access to older programming that CBS owns, including the original "Star Trek" series. The television company tightly guards online views of episodes of its current network hits, including "NCIS" and "Hawaii Five-0."  It does not make the latest episodes of shows available to Netflix, Hulu or Amazon.com.

CBS' strategy is designed to protect its TV ratings and the advertising revenue it receives when viewers watch programming on TV.  But CBS has been eager to structure deals to give companies access to its older titles that no longer air on television.

Later this year, users in Latin America also should be able to watch "Dexter" and other CBS titles online.

Earlier this month, Netflix said it would be launching movie and TV show streaming services in 43 countries in Central America, South America and the Caribbean. Netflix's arrangement with CBS represents it first international deal with a major content supplier.

Netflix said that CBS-owned  programming including past seasons of "Medium," "90210," or the Showtime programs "Nurse Jackie" and "Dexter" will be included in Netflix's $7.99 a month streaming plan.   

CBS Corp. owns the premium Showtime cable channel. 

"We are pleased to be partners with Netflix as they roll out their superb service to new markets," said Armando Nunez, president of CBS Studios International. "This new arrangement -- which does not compete with U.S. ratings or Showtime's domestic subscriber base -- underscores the popularity of CBS content around the world, and illustrates yet another meaningful way for us to realize incremental value from our vast library of content."

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Photo: Michael C. Hall in a scene from "Dexter." Credit: Randy Tepper / Showtime

No cable? You'll have to wait eight days to see Fox shows on Hulu [Updated]

Fox has become the first broadcast network to require people who want to watch its programs, such as "House" or "Glee," online immediately after they're broadcast to prove they pay for a cable or satellite service.

And for the moment, it had better be Dish Network

The network announced late Tuesday that beginning Aug. 15, users will need a login and password proving they have a paid television subscription in order to watch its programs on Hulu, Fox.com, or the cable and satellite company's own websites. Those who don't pay to watch TV will need to wait eight days in order to watch episodes online for free.

The first paid TV service to sign onto Fox's new arrangement is Dish Network, which has 14.2 million subscribers. No other cable or satellite company is part of the offering so far.

Previously, most shows from Fox and other networks were available to watch online the day after they aired for free, with commercials.

The strategy, called "authentication" in the television industry, has been under discussion since at least last month. It's part of the television industry's attempt to preserve its lucrative cable business model, through which they receive revenue from user subscriptions and advertisements, and discourage consumers from "cutting the cord" and only watching TV shows online.

That Fox has become the first network to do so is ironic because its parent company, News Corp., was, along with NBC Universal, one of the two media conglomerates to launch Hulu in 2008 as a defensive move against Internet piracy. Its success is now seen by many as undermining billions of dollars in cable revenues.

[Update, 5:20 p.m.: Subscribers to Hulu Plus, Hulu's paid subscription offering, will also have access to new Fox programs the day after they air.]

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Photo: Actor Hugh Laurie in the Fox TV series "House." Credit: Adam Taylor / Fox.

Apple Inc. in preliminary talks to acquire Hulu

Apple Inc. has joined a handful of companies, including its chief rival Google Inc. and online portal Yahoo, in weighing a potential offer for video service Hulu, a person with knowledge of the situation confirmed.

The discussions are still in the early stages, said that individual, who requested anonymity because the negotiations are confidential.

Apple spokesman Steve Dowling said the company would not comment on rumors or speculation. A Hulu spokeswoman similarly declined to comment. The discussions were first reported by Bloomberg News.

Hulu has emerged as one of the leading sites for watching TV shows online, attracting about 28 million monthly visitors, according to measurement firm ComScore. Its media owners, News Corp., Comcast Corp.-owned NBCUniversal and the Walt Disney Co., have opted to put the service up for sale, in part because its success was creating conflicts with existing business arrangements, but also to capitalize on the hot investment climate for technology companies.

The site could fetch a price as high as $2 billion, according to banking estimates.

Hulu offers a radically different proposition to consumers than is available now through Apple's iTunes store, which sells episodes of TV shows for $2.99, and, in some cases, offers a 99-cent rental. Hulu, by contrast, allows viewers the ability to watch current TV shows online for free -- but with advertising included. A subscription service, Hulu Plus, offers a broader selection of programs that can be viewed on more devices for a monthly fee of $7.99.

One media analyst said consumers simply haven't gravitated to Apple's TV rental model.

"The natural model for distributing TV shows is ad-supported or subscription, not on an individual program rental basis, nor even the episodic purchase model," said Arash Amel, IHS Screen Digest's research director for digital media.

"Subscription and advertising is what the TV consumer is familiar with, and any digital platform will have to replicate that model to succeed [in the] mass market," Amel suggested. "That is as true for Apple as it is for any other technology company seeking to provide TV content."

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Photo: Hulu main page image. Credit: Hulu

Hulu rehearses its sales pitch: more video; more subscribers

Now that Hulu is on the auction block, its media company owners are making sure the popular online video website gets plenty of exposure.

On Wednesday, at investment bank Allen & Co.'s annual gathering of media and tech moguls in Sun Valley, Idaho, Disney Chief Executive Bob Iger told reporters that Hulu's owners, which includes Disney, were "committed to selling" the 3-year-old venture.

"There is a lot of interest," Iger said, according to Bloomberg News.

Bankers representing Hulu in the last few weeks have had discussions with more than a half-dozen major media and technology companies, including Google Inc., Microsoft Corp. and Yahoo Inc., according to people close to the process.

Hulu's owners, which also include Fox parent News Corp., Comcast Corp.'s NBCUniversal and private equity firm Providence Equity Partners, have concluded that the venture's complicated governance structure is unwieldy, making it difficult for the three media companies and the minority owners to reach consensus. 

In addition, this seems to be a particularly advantageous time to sell because of Wall Street's increasing appetite for shares of technology firms that are now going public.

Also on Wednesday, Hulu Chief Executive Jason Kilar (who has a small ownership stake in Hulu) posted a blog trumpeting Hulu's second-quarter business highlights.

The Hulu Plus subscription service is on track to exceed 1 million subscribers by the end of the summer -- a few months ahead of schedule, Kilar said.

"We just closed our biggest month in Hulu Plus paid subscriber net additions by a healthy margin; we added more paying subscribers in June than we did in April and May combined," Kilar wrote. "We are extremely encouraged by the ramp of this business."

Hulu anticipates taking in $500 million in revenue this year.

The service, Kilar pointed out, also is a good citizen.  Hulu paid media companies that provide content to Hulu Plus "approximately $8 per subscriber per month" for programming found on Hulu Plus.  That represents a combination of income from the $7.99 a month subscription fee as well as advertising revenue to the site.