Hulu about to name new CEO
NEW YORK – On Friday morning, reports surfaced that Hulu LLC, the streaming joint venture between Disney (NYSE:DIS) and Fox (NASDAQ:FOXA), is close to naming Fox executive Mike Hopkins as its chief executive officer.
Bloomberg reported that two people with knowledge of the matter confirmed the report; however, they asked not to be identified because the deliberations are private. Hopkins, is currently the president of distribution for Fox Networks, and would succeed Andy Forssell, who is currently the acting CEO of Hulu.
Analysts believe that Hopkins would give Hulu additional advantage in negotiating with pay-TV services as the company seeks to become an online partner to the industry. According to Laura Martin, an analyst at Needham & Co, the selection signals Hulu becoming more of a media property than a technology innovator. ‘The money is in distribution fees from cable, satellite and telecom industries,’ Martin said in an interview. ‘Mike Hopkins shifts Hulu’s center of gravity away from Silicon Valley and towards Hollywood.’
Spokespeople for the Los Angeles-based Hulu declined to comment. Disney and the New York-based Fox had earlier planned to sell the streaming service, but dropped their plans in July after agreeing to bolster is technology, buy and develop programming, and build up marketing. In the decision, the companies, including Comcast’s (NASDAQ:CMCSA) NBCUniversal, a co-owner barred from an active role in managing Hulu, provided $750 million.
According to David Bank, an analyst at RBC Capital Markets in New York, it is believed that under Hopkins, Hulu will focus on building pay-TV fees to complement advertising and subscriber revenue. ‘Mike is one of the few guys who can build momentum for making Hulu an authentication service for the pay-TV industry,’ Bank said. ‘In doing so, Hulu could become the definition of TV online.’
Hulu is in the process of releasing 20 exclusive and original series this year and has plans to increase that number to 40 within two years. Currently, the company has more than 4 million subscribers for its premium service Hulu Plus and the company has more than 30 million unique visitors to its free, advertiser-supported service.
However, Hulu will need additional funding to produce original programming and according to Martin, the strategy ‘raises the question of whether advertising-driven streaming services will ever be successful without the support of subscription revenue.’