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Hulu and Networks Close to Signing a New Deal for Content Licensing

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By HVentertainment on May 13, 2011

TV on the Internet, closer to reality: Those who rely on the web to watch their television shows on places like Hulu or Netflix can breathe a sigh of relief this morning.

There’s been some doubt over the future of television on the Internet recently, as networks and content providers began turning against the popular services in recent months. Or perhaps, more specifically, it wasn’t that they turned against them but they wanted more favorable contract terms.

The reasoning is simple: Why should Hulu or Netflix profit on the backs of content from places like ABC, Fox and NBC? That’s only made ridiculous by the fact that those companies own Hulu!

Anyway, for a while it looked like ABC, Fox and NBC were doing their best to drive Hulu into the ground by hemming and hawing about show windows and content availability and licensing fees.

Some even speculated recently that the networks would pull their content from the Internet service once their existing contract ran out.

But that isn’t the case. Though no formal deal has been announced, Peter Kafka is reporting that Hulu and their content partners have reached an agreement to extend the content licenses currently in place. A new deal should be announced within the week.

People familiar with the negotiations tell me that the joint venture’s basic structure will remain the same: Hulu.com will continue to be an ad-supported site, while the Hulu Plus subscription service will offer more programming, and the ability to watch it on devices like Apple’s iPad.

The new deal terms are unlikely to change things that will be obvious to casual Hulu users. It’s possible that some programs may be withheld from the site, but it’s more probable that the changes will affect things like programming “windows”, which determine when a show turns up on the site and when it disappears, and how much Hulu pays for the content it shows.

The terms may also give content owners more flexibility to distribute their programming on other digital outlets.

Users won’t notice much of a difference to the site, and this news shouldn’t come as much of a surprise. The three networks are sitting on an Internet gold mine, and it would be foolish to blow the success they’ve had with Hulu in any way, shape or form. Aside from Netflix, it’s the singular destination for people to watch great television and movie content on the Internet. Rather than work against Hulu, the networks should be figuring out a way to make it better.

With this hurdle cleared, the next bump in the road for Hulu will be negotiating a contract extension for CEO Jason Kilar, who has been instrumental in building and shaping the site since its inception in 2007. Kilar’s contract ends in July. Rumors are already floating that he may leave for something else.

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