The quickest way to set off at least one media exec I know is to praise Jason Kilar for making Hulu work. I can almost set a timer for the refrain. Look at what he had to work with — content from equity partners NBC Universal & Fox , eventually joined by Disney, plus many other key content and distribution deals done before he entered the picture.
Fair enough. Amazon vet Kilar, who announced his long-anticipated departure as CEO of the video portal today, had a lot to work with when he was hired in the summer of 2007 to make sure NewCo, known as ClownCo in media circles, didn’t fall flat. The launch valuation of $1 billion, cemented by a $100 investment from Providence Equity Partners, preceded him too. He had top-level champions who wanted to see Hulu work in News Corp. COO Peter Chernin and NBCU CEO Jeff Zucker, and other key execs at the founding partners who were committed enough to overcome those who weren’t. (You can’t overestimate the value of knowing that the CEO had to come from outside their companies and from a different perspective for the joint venture to have a prayer.) And there are a lot of ways you can gauge his success or failure; he looks better by some measures than others.
But by one very important measure, Kilar did a lot right. Unlike a lot of other bright media ideas (and plenty that weren’t so bright), particularly those requiring cooperation across usually competitive companies, Hulu launched and grew. It avoided the tech meltdowns that could blunt consumer interest, starting with a highly usable player. Kilar drove some distribution partners crazy and precluded deals with others by insisting on that proprietary video player. He also angered some consumers, particularly cord cutters, by keeping tight controls on the way Hulu was delivered.
As a private beta user turned Hulu Plus subscriber, I’ve seen my share of glitches but from the start it simply worked without the level of frustration I’ve felt with so many other media products. (Amazon Unbox, anyone?) A lot of people contributed to that but Kilar’s often single-minded insistence on the best user experience possible, including pushing back the public launch by months, was at the core. That sounds like such a basic, common-sense thing — but technology, common sense and television network all too often are words that don’t belong in the same sentence.
Bad user experience can tank a startup but, as is the case with access to top content, a good one is no guarantee of success. It takes more than content and usability to build a 600+ person company with nearly $700 million in revenues last year, high-profile placement across devices and platforms, and a growing paid subscription base. In his blog post announcing plans to leave this quarter, Kilar said Hulu added a record 200,000 subscribers in the past seven days; he claimed more than 3 million Hulu Plus subs in his Dec. 17 year-end report.
Kilar leaves with some lovely parting prizes, including a reported $40 million buyout of his equity following the partners’ decision to stay in the video portal business for now, and a high ranking in the media-tech CEO candidate pool. My educated guess is that he will take a family break before a next public step.
As for Hulu, the choice Disney and News Corp. make for a successor (Comcast NBCU is still on the post-merger sidelines) should say a lot about the video JV’s post-Kilar direction. Think money, not product.