Magazine article ADWEEK

Character Study: With Originals like Animated Series the Awesomes, Hulu CEO Mike Hopkins Helps Digital Video Get the Respect It Wants-And the Hits His Company Needs

Magazine article ADWEEK

Character Study: With Originals like Animated Series the Awesomes, Hulu CEO Mike Hopkins Helps Digital Video Get the Respect It Wants-And the Hits His Company Needs

Article excerpt

At the moment, Mike Hopkins has the two hardest jobs in online video. The first is as CEO of Hulu (its third in a year and a half), where he's responsible for a growing over-the-top video business that competes with juggernauts like Netflix and upstarts like Amazon Prime. And his other job is, well, as CEO of Hulu, where he looks out for the interests of owners Fox, Disney and silent partner NBCUniversal, three linear TV giants with huge broadcast networks and dozens of cable channels between them.

It helps that Hopkins has a background negotiating some of the toughest deals in the business. He was president of distribution for Fox Networks, negotiating compromises in the increasingly bitter world of affiliate fees between the Fox channels and MSOs like Dish and Comcast.

"The distribution world is pretty rough-and-tumble in terms of getting those deals done," says Hopkins, who has had to slide into home more than once. In October 2010, he signed one of those last-minute distribution deals that have come to characterize the industry, averting a blackout of Fox's owned-and-operated broadcast stations for some 4 million Dish Network subscribers just as the satellite service was set to go dark. The previous week, he had stared down Comcast during a blackout in the New York area.

It wasn't fun.

"It's gotten worse and worse," as Hopkins puts it. "The last three or four years it's been really serious. The numbers are huge and the margin compression that the distributors have is very real."

The last thing Hulu wants to do is contribute to that compression. So when Hopkins, formerly a member of the Hulu board for Fox, was given the task of managing the entire joint venture--which is constantly in danger of competing with itself--he had the necessary experience of having represented his company's interests in a tense environment.

And there's one important reason to keep Hulu afloat from its owners' perspective: Revenue is on a serious upswing. Last year the company crossed the $1 billion threshold, as Hulu says it has attracted 6 million subscribers to its Hulu Plus service, now an integral part of its long-term strategy, a strategy Hopkins has had a direct hand in shaping.

Last year, Hopkins was on the Hulu board when its owners decided to reverse the internal economics of its advertising. It was a call that settled some longstanding grudges between Hulu and the ad sales reps at its owners, who had never been that happy with Hulu's buy-your-own-avails approach to its owners: Hulu would no longer own all the ad inventory on its owners' content and sell part of it back to them. Instead, NBCU, Disney and Fox now directly sell about 90 percent of the inventory on shows they stream on Hulu and sell the other 10 percent to the service.

Though it may sound like a raw deal, Hulu has something no other digital video outfit offers: content from three of the Big Four broadcast networks the day after they air it, as well as fresh content from other networks, including The CW. That content and Hulu's slate of original programming--including The Awesomes, an animated series created by Seth Meyers, and The Wrong Mans, a British action-comedy--help to drive all-important subscriptions.

The question, of course, is whether a service that provides TV content without a cable subscription can ever be good for programmers who rely on the dual-revenue stream of cable fees and advertising. Hopkins says it is, and that cord cutting is a serious misnomer.

"Nobody can stream Hulu or any of our competitors unless they have a broadband connection," and frequently, broadband providers also sell cable services, he notes. "We have to work very closely with all of those players, and we're actively talking to [the multichannel video programming distributor, or MVPD] side, working on them to sell Hulu Plus as part of their offering."

That is an attractive proposition, potentially. …

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