Welcome to Tech Stuff, a production from iHeartRadio. Hey there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with iHeart Podcasts and How the tech are you? You know, I've talked about streaming an awful lot on the show. Now just for context tech Stuff. This podcast began after Netflix had already kind of got the ball rolling back in January two thousand and seven, so I didn't have an episode that covered the story of Netflix launching its online video streaming But in twenty thirteen we did do an episode about the Big three streaming services, which at that time included Netflix, Amazon, and Today's Star Hulu. So we're doing actually a two parter on Hulu. This will be part one. So even back then we mentioned how there were other offerings available beyond the Big three, but today it's almost a joke with how many services are out there, and it's come as no surprise that we're starting to see these different services kind of glom on and merge together, either in bundles like the one Comcast is going to offer with Netflix, Peacock and Apple TV Plus, or in outright mergers and acquisitions such as what's happened with Disney and you know Hulu. It's almost like the streaming landscape is slowly transforming into what cable television used to be. And we already know that cable TV's business model has a ceiling because we hit that ceiling. That's why we're seeing things kind of in a decline or one of the reasons why I shouldn't be so definitive, I guess. Anyway, all that's beside the point. I want to talk about Hulu. How Hulu got started, because it's an interesting origin, and how the service and company evolved, and how now it is co mingling with Disney Plus, even as the actual acquisition deal is still kind of finalizing, despite the fact that Disney paid the quote unquote final fee last year. That whole story is just it really just points to corporate shenanigans, honestly, in my opinion at least, So let's start off at the beginning, where I am told it's a very good place to start. So hulu story, at least, the part of Hulu's story that faced the public, began in March two thousand and seven. Hulu, which was not named at this point. It didn't have its name, but what would become Hulu was announced as a joint venture between newscre and what at that time was just plain old NBC Universal. Comcast would announce plans to acquire NBC Universal two years later, and so things would get more complicated down the line. Now this is where my memory actually plays tricks on me, because when I was thinking about this before I actually started to dig into all the different articles and blog posts and stuff around the time of Hulu's launch. In my head, Hulu was meant to be a counter to Netflix because Netflix was getting into video streaming. But as it turns out, that really isn't the case when you're talking about the two thousand and six two thousand and seven era, because at that stage, Netflix wasn't really seen as that large of a threat, right. I mean, Netflix had killed Blockbuster arguably, but it wasn't thought to be setting its sites on traditional broadcast and cable media. Instead, Netflix was essentially viewed as Blockbuster by mail because it was much better known for its DVD and Blu ray rental services than as a video streaming platform. So this was well before Netflix would shake things up with its own original programming like House of Cards. House of Cards didn't debut until twenty thirteen, so Netflix was not seen as a existential threat at this point. Instead, Hulu's reisondetre had more to do with piracy that was happening on YouTube and how internet streaming was starting to show signs that it could impact traditional cable television, as well as concerns about a company that was on a metaphorical rocket ship around this time, and in that case, I'm specifically talking about Apple, not Netflix. But first let's start with YouTube. So Steve Chen and jau Ed Karim and Chad Hurley founded YouTube in two thousand and five. These days you can find epic long videos on YouTube. In fact, over the weekend yesterday, I was watching a four hour video from Jenny Nicholson, who produces phenomenal video essays. They're few and far between, but she puts a ton of work into them, and she did a four hour video about her experience at the Star Wars Galactic Cruiser Hotel at Disney World, and it's fascinating. It's a little it's very cringey at times if you're not into like participatory theater. Even as someone who has performed in participatory theater. I found it a bit cringey at times, not because of Jenny, but because of the situation that was going on. And it's also like just frustrating to see someone who is clearly so passionate about Star Wars and who has a really good platform ended up having a really, I would argue, lackluster experience for a premium price. Anyway, I don't know Jenny Nicholson, she doesn't know me. I just like her work. And the point was that today you can watch four hour long videos on YouTube if you want to. But you know, the interesting thing is when YouTube first launched, there wasn't really a limitation on video length back then either. Now, the resolution for YouTube videos was way way lower, but yeah, you weren't limited to short videos. However, that changed in the spring of two thousand and six, and the reason for that change is because a lot of the longer videos that were getting uploaded to YouTube were bootlegs or pirated copies or unauthorized uploads of films and TV shows. So that was what was making studios angry. It was copyright infringement. You know, it was going up without their consent and without their compensation, and in fact, in those days, YouTube wasn't monetizing anything. This was in the growth phase for YouTube, so the whole media industry was starting to get pretty prickly about this. And you know, just a few years earlier, that industry ended up banding together and did a number on peer to peer networking services like Kaza and Napster like they sued those companies into oblivion. So obviously YouTube was not super keen on get the studio's iire in that same way, it could be a threat to their very existence. So in March two thousand and six, YouTube issued a new limitation on videos. They could only be up to ten minutes long, and then you would get cut off, So you couldn't post a full television episode or a movie in one video. If you were really trying to share that kind of thing, you had to find places to break up the video into ten minute or shorter increments and then do a whole series of them. So you would have to go to a lot of trouble. In other words, in order to get just an episode of a television show up, let alone a movie. Plus you would still potentially get into trouble down the line if the studios found out, hey, you're publishing stuff without our permission. But this is why older YouTube videos, the really long stuff, would be divided into multiple parts. I'm reminded of the infamous Star Wars episode one review by Red Letter Media, the mister Plinkett review that was originally in several segments because old man mister Plinkett had a lot to say about it. Also, I didn't realize this episode was going to be so Star Wars heavy. That wasn't my intent. But in the back half of two thousand and six, Google acquired YouTube for the princely sum of one point sixty five billion dollars in Google stock. Google definitely had a vested interest in making certain that the piracy issue was addressed because as a big company that had deep pockets, and you know, there's nothing stopping the media companies from coming after that. Filthy, filthy luker. If Google seemed complacent with piracy while the company discouraged the practice, it's you know, the users who ultimately were steering things, and the folks at major media companies were not thrilled about not having control over this. You did have major studios establish their own YouTube channels, but I bet that didn't feel so great. To them. Either, YouTube could help with marketing and spread awareness of shows and that kind of thing, but monetizing your online publishing was a different matter. I mean, the official YouTube Partner program didn't launch until the end of two thousand and seven, and you know, most businesses are not keen to give away for free what they typically would earn revenue on, so finding a way to deliver television content online in a way that could actually generate revenue was a long term goal. Perhaps of more concern, however, was Apple, at least to NBC Universal's CEO Jeffrey Zucker at the time. This has to do with the media industry's challenge of figuring out how to incorporate streaming at all in its overall strategy, let alone how to set streaming up as a potential successor to broadcast in cable distribution. Apple already had an established business in which folks could browse the iTunes store for media content, which included television shows and films, and users could purchase those things through the iTunes store, which made Apple kind of a gatekeeper for media. Plus, Apple could take a hefty cut of those transactions, which means a lot less of that cheddar would make its way to the studios that were actually responsible for producing the content. And just as companies aren't keen to give away for free what they usually make money off of, they're also not super happy to share their lunch with someone else. Dollars going to Apple should be going to the studios. Gush, darn it. So this is what Jeff Zucker, the CEO of NBC Universal, was up in arms about. He proclaimed that iTunes, while an effective way to deliver television content to digital customers, was really a way to go quote from dollars into pennies end quote on those transactions, meaning that media outlets like NBC Universal should be making much more per transaction than what they were, and that the business model heavily favored the gatekeepers like iTunes. So what would be the solution. Well, the solution is to make your own media streaming platform, as Bender from Futurama would say, and you would control this platform. Zucker made some pretty big decisions leading up to the announcement of Hulu. He decided not to renew NBC Universal's contract with Apple, which meant NBC content would disappear from the iTunes store. He also had the company closed down the NBC Universal YouTube channel, so you couldn't get NBC Universal content there either, at least not legally, and all the while, NBC Universal began to work with newscre the owners of Fox at the time, to create what would become Hulu. All right, we're going to continue this story in just a moment, but first let's take a quick break to thank our sponsors. So we're back, News Corp. Owners of Fox, twentieth Century Fox at that time, and NBC Universal, which would soon become the property of Comcast, get together and decide that they want to make their own streaming thing, but they're not entirely sure what that's gonna be. Originally, the plan was to make a way to share or post content from these two companies on various places across the Internet, specifically on sites like Yahoo, Aol, and the king of social media MySpace. That's a trio of names that at one point in the Internet history, all three of those were considered unassailable. They were thought of as being giants and too big to fail, which really just proves the too big to fail concept just isn't true. You're never too big to fail. We humans can always find a way to fail if we have enough time on our hands to do it. Anyway, you probably know that you can embed media players on web pages, right If you've ever visited a web page that had a YouTube player embedded in that page, you know what I'm talking about. You can watch a YouTube video within a web page without actually having to go to YouTube itself. Well, that's what Hulu was trying to do originally. Of course, it wasn't called Hulu yet. In fact, it wasn't called anything yet. But the basic idea was to follow this particular strategy. So why were the companies thinking in this way? What largely had to do with the monumental acquisition that news Corp Had made In the summer of two thousand and five. News Corp bought MySpace for a whopping five hundred eighty million dollars. This would later turn out to be a colossal mistake, as news Corp would ultimately dump my Space for just thirty five million dollars in two thy eleven. So buying something for five hundred and eighty million and then selling it for thirty five million not great. In fact, for some it would rank as one of the worst deals in tech history. I don't know if it quite merits that because there have been some other whoppers that have happened, Like it's not good, but there have been other really bad ones. I will say that the MySpace acquisition is perhaps one of the most infamous bad tech deals. Anyway, NewsCorp had this social media platform, and they had it since late two thousand and five. And remember Facebook wouldn't really start its trajectory of crazy growth until late two thousand and six, when it would finally open up to people who weren't you know, college students. And it's easy to forget, but we're talking about time when MySpace was almost synonymous with social networks. I mean, nobody thinks about it today, but at the time it was the dominant social platform. So the thought was that this social platform asset could serve as a brilliant way to serve media to customers. You know, design a web delivery system that leverages the places where people were already going online. That would include the AOL landing page because tons of people were still using Aol as their Internet service provider, or the Yahoo landing page because Yahoo was essentially serving as a web portal to the rest of the world. Wide Web, and then MySpace the dominant social platform. You wouldn't have to train people to go to your website. You would just establish a foothold in the places where people were already congregating. This strategy would change in large part due to the companies coaxing a project leader from a different Internet giant. So I'm talking about a man named Jason Kylar, who was a senior vice president at Amazon, and he got lured away to become the head of this still unnamed project between newscre and NBC Universal. Now, Kaylar's career would have a lot of interesting intersection points with streaming in general and with Hulu in particular. So for example, before he worked at Amazon, Kyler was an analyst with the Walt Disney Company for a couple of years. Obviously, Disney will go on to become an important part of the Hulu story, and I might as well talk about his time after he left Hulu, because this isn't an episode about his career specifically, although he does play a very important part in this particular episode. He would stick with Hulu for six full years, which you know, it's not bad for a CEO of a startup company. If you're not like a founder, especially like he was brought on to do this, although you could argue that the work he did was at least equivalent to a regular founder. He would then go on to co found a video platform site called Vessel. He did that in twenty thirteen. Verizon would acquire Vessel, and not long after that, Verizon would shut down Vessel. But hey, you know that's a big payout, baby. So Kyler would also sit on the board of directors for several different organizations and companies, and then he would become CEO of WarnerMedia in twenty twenty, which means he was there during the early launch days of HBO Max, that streaming platform, and he stuck around as CEO of WarnerMedia until AT and T decided to divest itself of WarnerMedia and sell it off to Discovery, whereupon David Zaslov would take over the whole shebang. And we all know about the Zaslov regime over at Warner Brothers Discovery. So his departure, he's kind of been keeping himself busy by being on the board of directors of even more organizations and companies. But throughout his entire career, he's been heavily involved in media in general and streaming in particular, and it's a pretty impressive career. So Kyler comes over from Amazon and leads this project, and the strategy then starts to shift. It moves away from this idea of an embedible player that will live in other places to a destination media site similar to YouTube, but specifically crafted to host studio produced entertainment. Right YouTube is the user generated video site. You go to YouTube typically to watch stuff that other YouTubers have created, not to watch things that were produced by an established media company. So this project would be more for the established stuff, the studio stuff, the professional stuff, and the companies were also hoping that this would discourage Netflix's growing relevance. Again, Netflix really wasn't a threat yet, but the concern was that they didn't want a company that was not part of the established media industry to become the gatekeeper for the online branch of media. For the longest time, television and film studios had reigned supreme. They didn't have to answer to anyone else. Really, you know, they were times where they got broken up by various regulators and governments because they owned so much of the entertainment landscape that it was considered to be a monopoly. Like when a company owns not just the movie studios but also movie theaters and film processing companies, that becomes a problem. So all that got broken up years and years and years ago, but they still had a ton of power, so the idea of seeding some of that power to a company like Netflix was not very palatable when Kyler took over the project. The nickname that folks gave to this because it still didn't have an official name yet, was Clown Co or Clown Company, And apparently it got that nickname because the general consensus was any joint project that would be helmed by two or more established media companies was bound to fail. At some point, one company would try to exert more authority than the other or object to some fundamental aspect of the project, and nothing would ever resolve. You would never get consensus among the stakeholders for what was the right thing to do, and the whole thing would crumble in on itself. Tech blogs, in particular, prophesied doom from the get go. In July two thousand and seven, a company called Providence Equity joined News Corp. At NBC Universal as a stakeholder in the project, purchasing a ten percent ownership in Hulu, and this was quoted as being somewhere around one hundred million dollars of equity in the company. Just pretty darn impressive. Now, the name Hulu, I don't know exactly when it was arrived at, but I do know when it was revealed. It was revealed in August two thousand and seven when the website actually went live. However, this website went live with no video. You couldn't go there to watch anything. It was kind of like a site that was parked there and was announcing the name of the service, so there was no streaming player yet. Kyler later said that the actual name came from a Mandarin word that means gord, with the idea of Hulu containing all this stuff in it, it'd be a streaming service with access to lots of content, similar to a stuffed gord. I guess I don't know. I don't really get the analogy that much. I don't know how much the actual word was super important. The point is the name was short, it had a nice sound to it, it was easy to remember, and folks wouldn't make it so much fun of it, like you didn't hear people making as much fun of the name Hulu as they later would. For like Quibi Quibi was the source of endless jokes, Hulu, I don't remember a lot of people making fun of it. While the site would go into beta testing before the end of two thousand and seven, it would not officially launch as a service until October two thousand and eight. By that time, Netflix's streaming service had a year's head start, but Hulu had something that Netflix didn't have. Hulu, with its agreements with the various studios, which would change out fairly frequently in the year leading up to launch, would be able to host episodes of shows the day after they originally aired on TV. Netflix, by comparison, would only be able to add shows in seasons, So you would get an entire season of a show added to Netflix once the company had secured a licensing deal for that particular season, and then you could watch all the episodes in that season, but you wouldn't be able to see the latest stuff. Hulu was kind of the opposite. You could see the latest stuff, but you couldn't watch a full season early on. Hulu was free to use and it was also ads supported, but Kyler was also careful not to overload ads on episodes, which is something I wish other companies would practice. I'm not naming names, I'm not making any accusations about anyone specifically, but on a totally unrelated note, I am obligated to take another break to take our sponsors. We'll be right back. Okay, so we are back. And besides me being cheeky about ads, Kyler was very much aware of the effect ads have on viewership. He would later publish a blog post that would outline certain observations he had made while in the entertainment business, and one really big one was about ads. Specifically. He wrote in a memo that quote, traditional TV has too many ads. Users have demonstrated that they will go to great lengths to avoid the advertising load that traditional DV places upon them. Setting aside sports and other live events programming, consumers are increasingly moving to on demand viewing in part because of the lighter ad load end quote. To that end, Hulu typically limited ads to two minutes of advertising per half hour of content, which was far below what you would find if you were tuning in to live TV. For films, studios had the option to allow users in ad free experience during the film itself if in return, the users agreed to view ads up front before the film started. You've probably seen a message that was something like, thanks to our sponsors, you can watch the following presentation free of ads, or something like that. In that same memo in which Kyler pointed out the issue with ads, he also talked about how audiences were increasingly migrating to on demand viewing experiences. Traditional television requires viewers to watch on their schedule, not the viewers, So that's frustrating, right when you have to be available when the program airs. Technology started to allow for time shifting. I mean VCRs led the way, at least for those of us who are willing to learn how to set a VCR to record a specific channel at a specific time, which wasn't always user friendly or easy. Then we could watch the programming whenever we wanted to, not just when it was scheduled to air. More sophisticated methods like DVRs would make this far more easy and accessible, and audiences would respond to that. They really enjoyed the freedom that this represented. The era of must SETV was changing. We weren't necessarily glued to our couches on Thursday nights or whatever, and the arrival of on demand viewing made this even better. A service that let you select whatt to watch when you wanted to watch it without having to decide ahead of time, like without having to set a DVR or VCR a big deal. Hulu, despite a bumpy ride in development, was poised for great success. Sure, the media companies that signed on to be part of the project kept shifting around, which meant it was hard to predict what material would actually be available to viewers once Hulu went live, but it still set itself apart from both YouTube and Netflix. There were limitations, however. Typically Hulu would only have a handful of episodes available for viewing and would remove the oldest of those episodes while adding new episodes, so you might only be able to access the last few episodes of any given show, but you wouldn't be able to really dive into the entire history of a program. This was in an era in which Kylar was trying to establish Hulu and when companies were even learning which strategies would be viable, so like this was all very experimental. Everyone seemed to know that it would take time for streaming to shake out to become a sustainable model, and that this would mean that there'd be a lot of investment and trial and error in the early days, and that it would require careful thought to find a way to make streaming work long term on a financial level. That is. Meanwhile, the cord cutting apocalypse was kind of on the horizon. Now. It wasn't quite to the point where people were suddenly like severing their cable connections right out of the gate, but young adults who had spent more time consuming content online than through traditional media were less likely to become cable subscribers, and that meant that simply through attrition, the cable business was facing a crisis. So there was a healthy incentive in place for streaming platforms to figure it all out, and it really big incentive for traditional media companies to figure a strategy that worked, because if they didn't, they were kind of dooming themselves. In two thousand and nine, Disney would join the Hulu party. Literally, they purchased a stake in Hulu. Obviously, this was well before the Walt Disney Company would launch its own Disney Plus platform, so At this point, Disney, NBCU Universal, and NewsCorp each owned approximately equivalent portions of Hulu, and then you had ten percent left over for the investment company. Disney agreed to make available some of their older Disney films on the service, and they also chose Hulu as the home for ABC programming because Disney owns ABC as well as some of the originals that Disney had produced for the Disney Channel. Now, at this stage, Hulu was competing against a different streaming platform, and we're still not talking about Netflix here. Instead, we're talking about TV dot Com, which I had completely forgotten about. TV dot Com. I knew about it when it came out, but I hadn't thought about in years. But that was a company that CBS Corporation acquired in two thousand and eight because again CBS, since it wasn't a stakeholder in Hulu, wasn't exactly eager to allow these competing media companies to be gatekeepers for CBS materials. So instead they go out and they buy their own streaming platform. At one point, the partners behind Hulu had some of their programming on TV dot Com as well, but that would change when CBS took control and Hulu pulled all of its programs off TV dot com. The camps were starting to form around streaming, with no one wanting anyone else to be the dominant player or to be able to have leverage over them. The big networks continued their long standing rivalry, and pretty much all of old media was looking at Netflix with suspicion also YouTube. Even though YouTube, I would argue, wasn't really in the same space as the others, it was a hated rival among media companies because it was stealing a whole lot of eyeballs, kind of like the Corinthian in the Sandman comics. In twenty ten, Hulu introduced a subscription service called Hulu Plus. Now this was different from the Hulu Free service and that viewers would be able to access full current seasons of shows, not just the last few episodes. You could watch a full season at least the latest one. You couldn't necessarily watch every season of a Showers would also get earlier access to the latest episodes. Essentially, they'd be able to watch an episode when that show went to air on television, you could access it online if you were a Hulu subscriber. That subscription cost nine dollars ninety nine cents per month when it launched, and to the bewilderment of many, that service would still include ads supported content, so you're not paying to get ad free content, it would still get ads. Some folks asked why would there still be ads if you also had to pay a subscription, and the best answer seemed to be, we want money on that front. Twenty ten is also when Hulu planned to hold an IPO, or initial public offering. That's when a privately held company becomes a publicly traded company, but Hulu would in fact not go public that year. Ultimately, the stakeholders decided to keep it a privately held company, and there were rumors of a real IPO cropping up in late twenty twenty three, but as we will learn, that's not the path that the company, but he would ultimately take. One thing Hulu did fairly early on was to produce original content specifically for the Hulu platform itself, and this began in twenty eleven, which is two years before Netflix would do the same thing. So for the first few years, Hulu really just existed as a place where folks could go to watch recent television programs, and it was pretty handy if you happen to miss an episode of your favorite show, you know, if it was a show that was on a network that partnered with Hulu, at least you could potentially catch that episode starting the day after it originally aired, and you would also see fewer commercials than you would if you had watched it on television in the first place, which is not a bad deal. Before getting into the content game directly, Hulu also served as a place where web originals could find a home. So these were programs made by other companies but with the web in mind, as opposed to on traditional media. The first actual Hulu original was a show called The Morning After. This was a sort of pop culture roundup show. The first scripted series would come out in twenty twelve, and it was called battle Ground, which was a satirical political comedy series that the showrunners originally pitched as a TV show, but they couldn't find a network to pick up the series. Hulu provided an alternative pathway to find an audience. Hulu would increase its focus on original content, and this gradually meant that the original strategy of providing access to broadcast TV would start to decline in importance, and another shift was coming as well. Jason Kyler, who had led the company from when it was still taking shape in two thousand and seven, announced he would be resigning from the company in twenty thirteen. Now, under Kyler's leadership, Hulu had gone from this nebulous idea that the industry in general predicted was going to be a colossal failure and had created a business that had an upward revenue trajectory that was pretty impressive. For example, the Hollywood Reporter said that in twenty twelve, Hulu posted a sixty five percent increase in year over year revenue. However, percentages never tell you the full story, right Because if I gave you a dollar today and then tomorrow I gave you two dollars, that's a one hundred percent increase day to day. But that's still just two dollars or three dollars total. However, that being said, the twenty twelve revenue was six hundred and ninety five million dollars, which is not chump change or you know, clown company dollars, I guess. Also, by this time, the stakeholders had been whittled down to news Corp, NBC, Universal, and Disney because the three other stakeholders had bought out Providence Equities stake for around two hundred million dollars according to Bloomberg. Now, remember when Providence first invested, they were taking like one hundred million dollar equity steak in Hulu, so they essentially doubled that, which is not bad. Kylar wasn't the only executive leaving the company at that point. Another was the chief technology officer for Hulu, a guy named rich Tom, which you know, that's a great name. Oh you mean rich Tom. The rumor mill said that Kyler's decision was one fueled by frustration he had with his corporate overlords, that that Kyler had really wanted to secure more licensing deals in order to feature a wider spectrum of programming on Hulu, but that he was being stonewalled by the various corporate stakeholders and denied these. These budgets and licensing fees were growing pretty hefty, and this was largely because Netflix was pouring buckets of cash into its own strategy. And we'd get back to the conundrum that the media companies were in, so in an ideal world from the studio perspective, not the audience perspective. But if you're a studio, the ideal is that you would have your owned and operated streaming service specifically for your studio's output. And of course, as we go down the timeline, that's kind of what would happen, right, because we would get a bunch of platforms, ridiculous ones. You know, you look out there and you've got your your Peacock Paramount plus, CBS All Access, HBO Max. All of these would start to pop up many years further down the line, so we would see this kind of come to pass. But that's something that all these studios wanted early on. They just didn't have the infrastructure. They didn't invest in building that out. So back then, back in twenty thirteen, there were only a few options open to you. If you wanted to make your material available for streaming. You could sign on with Netflix, or you could sign on with Hulu. Anything else was seen as being a little too obscure to make much sense, like it just wouldn't be a good return on investment. And if you didn't sign licensing deals, well then you were leaving money on the table. So while studios weren't keen to turn a service like Netflix or Hulu into a gatekeeper. There weren't a lot of alternatives, and with Netflix willing to shell out crazy amounts of cash for licenses, it meant that Hulu was losing out. Now, as we would see, this isn't an episode about Netflix, but Netflix's strategy would ultimately be to invest more and more in original programming and kind of wean itself off of making these big licensing deals, which suited the studios fine because they would prefer to not have their stuff on Netflix if they could have it on their own platform anyway. The other big rumor behind Kyler's departure was that he was still focused on growing the business and his corporate overlords were hoping that he would switch more to a near term profit model. These two things are not always in alignment, right, because to grow often it means you have to spend more money, invest more. You're not going to see as big of a return. The folks who were owning the stakes were getting itchy. They wanted profit, and it also sounds like the various stakeholders were at odds with one another over how to even achieve the goals that they had, Like even when they had goals that were in common, they disagreed with how they should go about achieving those goals, and that put Hulu in kind of a corporate ug of war between the different stakeholders. So I wouldn't blame Kyler for a moment if that contributed to his decision to step down. I've been in corporate tug of wars in the middle of one, and it is the most frustrated I think I've ever been professionally. Anyway, it sounded kind of like the board level of Hulu was turning into what naysayers had been predicting back in the Clown Company days, right Like, it sounds like that's what was coming true. I already mentioned that Kyler would go on to co found a different video streaming site similar in some ways to YouTube, and that Verizon would subsequently acquire and then later shut down that website, and that Kyler then went on to become the CEO of Watermedia under at and T. Interestingly, in twenty sixteen, Time Warner, which would later become WarnerMedia, acquired a ten percent steak in Hulu. So again, those worlds would intersect a couple of times. I've said, like the corporate overlords of Hulu. The partnerships have changed over time, so at one time Warner was one of the owners. When Kyler announced that he was going to depart from Hulu in twenty thirteen, the company had yet to announce a replacement, and in fact, it took a little while before that would happen. It was a luxury that a privately held company can enjoy, I guess because if you're a publicly traded company, succession planning is something that investors take very seriously see also Disney. But eventually Hulu announced that Andy Forcell, who had been senior vice president of content at Hulu since two thousand and seven, would take on the job as an acting CEO. He would not be on that job for long. He would actually leave Hulu in late twenty thirteen. That's the same year that Kylar stepped down. So we're talking one year two different CEOs, really three, because the third one would take over after Forcell would leave, And interestingly, Forceell's journey would take him on to become the chief operating officer at Full Screen and then Ottermedia. Now, if you listen to my episodes about Rooster Teeth, those companies were going to sound familiar. He was part of that whole thing, and then ultimately would end up becoming the head of HBO Max over at WarnerMedia, which meant that once again he'd be working under his old boss, Kylar, who was the CEO of WarnerMedia at that time, and just like in twenty thirteen, Forceel would leave WarnerMedia around the same time that Kyler did after AT and T divested itself of WarnerMedia and sold it to Discovery. So time is a flat circle. Mike Hopkins, who had been president of Fox Networks Group, was then tapped to be CEO of Hulu, and this capped off an era in which many of the leaders who were part of the original team who built Hulu had at this point left the company. Reportedly, this had a pretty negative impact on employee morale. Hopkins would stick around for four years and provide some leadership stability at a time when it was sorely needed in the company. He would eventually leave Hulu to become chairman of Sony Pictures Television, and then after a couple of years of doing that, he would go on to join Ammazon on and became a senior vice president for Prime Video and Amazon Studios. But anyway, Hopkins takes the helmet Hulu, you might wonder what else was going on during his era as CEO, which went from twenty thirteen to twenty seventeen. That is what we're going to start to cover in the next episode, along with the story of where Hulu would go from there and how the company would reach where we are now, which is in this weird limbo because of a disagreement between Disney and Comcast over how much the company is actually worth. We'll touch back on that later this week. In the meantime, I hope you are all well and I'll talk to you again really soon. Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.

Welcome to Tech Stuff, a production from iHeartRadio. Hey there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with iHeart Podcasts and How the tech are you? You know, I've talked about streaming an awful lot on the show. Now just for context tech Stuff. This podcast began after Netflix had already kind of got the ball rolling back in January two thousand and seven, so I didn't have an episode that covered the story of Netflix launching its online video streaming But in twenty thirteen we did do an episode about the Big three streaming services, which at that time included Netflix, Amazon, and Today's Star Hulu. So we're doing actually a two parter on Hulu. This will be part one. So even back then we mentioned how there were other offerings available beyond the Big three, but today it's almost a joke with how many services are out there, and it's come as no surprise that we're starting to see these different services kind of glom on and merge together, either in bundles like the one Comcast is going to offer with Netflix, Peacock and Apple TV Plus, or in outright mergers and acquisitions such as what's happened with Disney and you know Hulu. It's almost like the streaming landscape is slowly transforming into what cable television used to be. And we already know that cable TV's business model has a ceiling because we hit that ceiling. That's why we're seeing things kind of in a decline or one of the reasons why I shouldn't be so definitive, I guess. Anyway, all that's beside the point. I want to talk about Hulu. How Hulu got started, because it's an interesting origin, and how the service and company evolved, and how now it is co mingling with Disney Plus, even as the actual acquisition deal is still kind of finalizing, despite the fact that Disney paid the quote unquote final fee last year. That whole story is just it really just points to corporate shenanigans, honestly, in my opinion at least, So let's start off at the beginning, where I am told it's a very good place to start. So hulu story, at least, the part of Hulu's story that faced the public, began in March two thousand and seven. Hulu, which was not named at this point. It didn't have its name, but what would become Hulu was announced as a joint venture between newscre and what at that time was just plain old NBC Universal. Comcast would announce plans to acquire NBC Universal two years later, and so things would get more complicated down the line. Now this is where my memory actually plays tricks on me, because when I was thinking about this before I actually started to dig into all the different articles and blog posts and stuff around the time of Hulu's launch. In my head, Hulu was meant to be a counter to Netflix because Netflix was getting into video streaming. But as it turns out, that really isn't the case when you're talking about the two thousand and six two thousand and seven era, because at that stage, Netflix wasn't really seen as that large of a threat, right. I mean, Netflix had killed Blockbuster arguably, but it wasn't thought to be setting its sites on traditional broadcast and cable media. Instead, Netflix was essentially viewed as Blockbuster by mail because it was much better known for its DVD and Blu ray rental services than as a video streaming platform. So this was well before Netflix would shake things up with its own original programming like House of Cards. House of Cards didn't debut until twenty thirteen, so Netflix was not seen as a existential threat at this point. Instead, Hulu's reisondetre had more to do with piracy that was happening on YouTube and how internet streaming was starting to show signs that it could impact traditional cable television, as well as concerns about a company that was on a metaphorical rocket ship around this time, and in that case, I'm specifically talking about Apple, not Netflix. But first let's start with YouTube. So Steve Chen and jau Ed Karim and Chad Hurley founded YouTube in two thousand and five. These days you can find epic long videos on YouTube. In fact, over the weekend yesterday, I was watching a four hour video from Jenny Nicholson, who produces phenomenal video essays. They're few and far between, but she puts a ton of work into them, and she did a four hour video about her experience at the Star Wars Galactic Cruiser Hotel at Disney World, and it's fascinating. It's a little it's very cringey at times if you're not into like participatory theater. Even as someone who has performed in participatory theater. I found it a bit cringey at times, not because of Jenny, but because of the situation that was going on. And it's also like just frustrating to see someone who is clearly so passionate about Star Wars and who has a really good platform ended up having a really, I would argue, lackluster experience for a premium price. Anyway, I don't know Jenny Nicholson, she doesn't know me. I just like her work. And the point was that today you can watch four hour long videos on YouTube if you want to. But you know, the interesting thing is when YouTube first launched, there wasn't really a limitation on video length back then either. Now, the resolution for YouTube videos was way way lower, but yeah, you weren't limited to short videos. However, that changed in the spring of two thousand and six, and the reason for that change is because a lot of the longer videos that were getting uploaded to YouTube were bootlegs or pirated copies or unauthorized uploads of films and TV shows. So that was what was making studios angry. It was copyright infringement. You know, it was going up without their consent and without their compensation, and in fact, in those days, YouTube wasn't monetizing anything. This was in the growth phase for YouTube, so the whole media industry was starting to get pretty prickly about this. And you know, just a few years earlier, that industry ended up banding together and did a number on peer to peer networking services like Kaza and Napster like they sued those companies into oblivion. So obviously YouTube was not super keen on get the studio's iire in that same way, it could be a threat to their very existence. So in March two thousand and six, YouTube issued a new limitation on videos. They could only be up to ten minutes long, and then you would get cut off, So you couldn't post a full television episode or a movie in one video. If you were really trying to share that kind of thing, you had to find places to break up the video into ten minute or shorter increments and then do a whole series of them. So you would have to go to a lot of trouble. In other words, in order to get just an episode of a television show up, let alone a movie. Plus you would still potentially get into trouble down the line if the studios found out, hey, you're publishing stuff without our permission. But this is why older YouTube videos, the really long stuff, would be divided into multiple parts. I'm reminded of the infamous Star Wars episode one review by Red Letter Media, the mister Plinkett review that was originally in several segments because old man mister Plinkett had a lot to say about it. Also, I didn't realize this episode was going to be so Star Wars heavy. That wasn't my intent. But in the back half of two thousand and six, Google acquired YouTube for the princely sum of one point sixty five billion dollars in Google stock. Google definitely had a vested interest in making certain that the piracy issue was addressed because as a big company that had deep pockets, and you know, there's nothing stopping the media companies from coming after that. Filthy, filthy luker. If Google seemed complacent with piracy while the company discouraged the practice, it's you know, the users who ultimately were steering things, and the folks at major media companies were not thrilled about not having control over this. You did have major studios establish their own YouTube channels, but I bet that didn't feel so great. To them. Either, YouTube could help with marketing and spread awareness of shows and that kind of thing, but monetizing your online publishing was a different matter. I mean, the official YouTube Partner program didn't launch until the end of two thousand and seven, and you know, most businesses are not keen to give away for free what they typically would earn revenue on, so finding a way to deliver television content online in a way that could actually generate revenue was a long term goal. Perhaps of more concern, however, was Apple, at least to NBC Universal's CEO Jeffrey Zucker at the time. This has to do with the media industry's challenge of figuring out how to incorporate streaming at all in its overall strategy, let alone how to set streaming up as a potential successor to broadcast in cable distribution. Apple already had an established business in which folks could browse the iTunes store for media content, which included television shows and films, and users could purchase those things through the iTunes store, which made Apple kind of a gatekeeper for media. Plus, Apple could take a hefty cut of those transactions, which means a lot less of that cheddar would make its way to the studios that were actually responsible for producing the content. And just as companies aren't keen to give away for free what they usually make money off of, they're also not super happy to share their lunch with someone else. Dollars going to Apple should be going to the studios. Gush, darn it. So this is what Jeff Zucker, the CEO of NBC Universal, was up in arms about. He proclaimed that iTunes, while an effective way to deliver television content to digital customers, was really a way to go quote from dollars into pennies end quote on those transactions, meaning that media outlets like NBC Universal should be making much more per transaction than what they were, and that the business model heavily favored the gatekeepers like iTunes. So what would be the solution. Well, the solution is to make your own media streaming platform, as Bender from Futurama would say, and you would control this platform. Zucker made some pretty big decisions leading up to the announcement of Hulu. He decided not to renew NBC Universal's contract with Apple, which meant NBC content would disappear from the iTunes store. He also had the company closed down the NBC Universal YouTube channel, so you couldn't get NBC Universal content there either, at least not legally, and all the while, NBC Universal began to work with newscre the owners of Fox at the time, to create what would become Hulu. All right, we're going to continue this story in just a moment, but first let's take a quick break to thank our sponsors. So we're back, News Corp. Owners of Fox, twentieth Century Fox at that time, and NBC Universal, which would soon become the property of Comcast, get together and decide that they want to make their own streaming thing, but they're not entirely sure what that's gonna be. Originally, the plan was to make a way to share or post content from these two companies on various places across the Internet, specifically on sites like Yahoo, Aol, and the king of social media MySpace. That's a trio of names that at one point in the Internet history, all three of those were considered unassailable. They were thought of as being giants and too big to fail, which really just proves the too big to fail concept just isn't true. You're never too big to fail. We humans can always find a way to fail if we have enough time on our hands to do it. Anyway, you probably know that you can embed media players on web pages, right If you've ever visited a web page that had a YouTube player embedded in that page, you know what I'm talking about. You can watch a YouTube video within a web page without actually having to go to YouTube itself. Well, that's what Hulu was trying to do originally. Of course, it wasn't called Hulu yet. In fact, it wasn't called anything yet. But the basic idea was to follow this particular strategy. So why were the companies thinking in this way? What largely had to do with the monumental acquisition that news Corp Had made In the summer of two thousand and five. News Corp bought MySpace for a whopping five hundred eighty million dollars. This would later turn out to be a colossal mistake, as news Corp would ultimately dump my Space for just thirty five million dollars in two thy eleven. So buying something for five hundred and eighty million and then selling it for thirty five million not great. In fact, for some it would rank as one of the worst deals in tech history. I don't know if it quite merits that because there have been some other whoppers that have happened, Like it's not good, but there have been other really bad ones. I will say that the MySpace acquisition is perhaps one of the most infamous bad tech deals. Anyway, NewsCorp had this social media platform, and they had it since late two thousand and five. And remember Facebook wouldn't really start its trajectory of crazy growth until late two thousand and six, when it would finally open up to people who weren't you know, college students. And it's easy to forget, but we're talking about time when MySpace was almost synonymous with social networks. I mean, nobody thinks about it today, but at the time it was the dominant social platform. So the thought was that this social platform asset could serve as a brilliant way to serve media to customers. You know, design a web delivery system that leverages the places where people were already going online. That would include the AOL landing page because tons of people were still using Aol as their Internet service provider, or the Yahoo landing page because Yahoo was essentially serving as a web portal to the rest of the world. Wide Web, and then MySpace the dominant social platform. You wouldn't have to train people to go to your website. You would just establish a foothold in the places where people were already congregating. This strategy would change in large part due to the companies coaxing a project leader from a different Internet giant. So I'm talking about a man named Jason Kylar, who was a senior vice president at Amazon, and he got lured away to become the head of this still unnamed project between newscre and NBC Universal. Now, Kaylar's career would have a lot of interesting intersection points with streaming in general and with Hulu in particular. So for example, before he worked at Amazon, Kyler was an analyst with the Walt Disney Company for a couple of years. Obviously, Disney will go on to become an important part of the Hulu story, and I might as well talk about his time after he left Hulu, because this isn't an episode about his career specifically, although he does play a very important part in this particular episode. He would stick with Hulu for six full years, which you know, it's not bad for a CEO of a startup company. If you're not like a founder, especially like he was brought on to do this, although you could argue that the work he did was at least equivalent to a regular founder. He would then go on to co found a video platform site called Vessel. He did that in twenty thirteen. Verizon would acquire Vessel, and not long after that, Verizon would shut down Vessel. But hey, you know that's a big payout, baby. So Kyler would also sit on the board of directors for several different organizations and companies, and then he would become CEO of WarnerMedia in twenty twenty, which means he was there during the early launch days of HBO Max, that streaming platform, and he stuck around as CEO of WarnerMedia until AT and T decided to divest itself of WarnerMedia and sell it off to Discovery, whereupon David Zaslov would take over the whole shebang. And we all know about the Zaslov regime over at Warner Brothers Discovery. So his departure, he's kind of been keeping himself busy by being on the board of directors of even more organizations and companies. But throughout his entire career, he's been heavily involved in media in general and streaming in particular, and it's a pretty impressive career. So Kyler comes over from Amazon and leads this project, and the strategy then starts to shift. It moves away from this idea of an embedible player that will live in other places to a destination media site similar to YouTube, but specifically crafted to host studio produced entertainment. Right YouTube is the user generated video site. You go to YouTube typically to watch stuff that other YouTubers have created, not to watch things that were produced by an established media company. So this project would be more for the established stuff, the studio stuff, the professional stuff, and the companies were also hoping that this would discourage Netflix's growing relevance. Again, Netflix really wasn't a threat yet, but the concern was that they didn't want a company that was not part of the established media industry to become the gatekeeper for the online branch of media. For the longest time, television and film studios had reigned supreme. They didn't have to answer to anyone else. Really, you know, they were times where they got broken up by various regulators and governments because they owned so much of the entertainment landscape that it was considered to be a monopoly. Like when a company owns not just the movie studios but also movie theaters and film processing companies, that becomes a problem. So all that got broken up years and years and years ago, but they still had a ton of power, so the idea of seeding some of that power to a company like Netflix was not very palatable when Kyler took over the project. The nickname that folks gave to this because it still didn't have an official name yet, was Clown Co or Clown Company, And apparently it got that nickname because the general consensus was any joint project that would be helmed by two or more established media companies was bound to fail. At some point, one company would try to exert more authority than the other or object to some fundamental aspect of the project, and nothing would ever resolve. You would never get consensus among the stakeholders for what was the right thing to do, and the whole thing would crumble in on itself. Tech blogs, in particular, prophesied doom from the get go. In July two thousand and seven, a company called Providence Equity joined News Corp. At NBC Universal as a stakeholder in the project, purchasing a ten percent ownership in Hulu, and this was quoted as being somewhere around one hundred million dollars of equity in the company. Just pretty darn impressive. Now, the name Hulu, I don't know exactly when it was arrived at, but I do know when it was revealed. It was revealed in August two thousand and seven when the website actually went live. However, this website went live with no video. You couldn't go there to watch anything. It was kind of like a site that was parked there and was announcing the name of the service, so there was no streaming player yet. Kyler later said that the actual name came from a Mandarin word that means gord, with the idea of Hulu containing all this stuff in it, it'd be a streaming service with access to lots of content, similar to a stuffed gord. I guess I don't know. I don't really get the analogy that much. I don't know how much the actual word was super important. The point is the name was short, it had a nice sound to it, it was easy to remember, and folks wouldn't make it so much fun of it, like you didn't hear people making as much fun of the name Hulu as they later would. For like Quibi Quibi was the source of endless jokes, Hulu, I don't remember a lot of people making fun of it. While the site would go into beta testing before the end of two thousand and seven, it would not officially launch as a service until October two thousand and eight. By that time, Netflix's streaming service had a year's head start, but Hulu had something that Netflix didn't have. Hulu, with its agreements with the various studios, which would change out fairly frequently in the year leading up to launch, would be able to host episodes of shows the day after they originally aired on TV. Netflix, by comparison, would only be able to add shows in seasons, So you would get an entire season of a show added to Netflix once the company had secured a licensing deal for that particular season, and then you could watch all the episodes in that season, but you wouldn't be able to see the latest stuff. Hulu was kind of the opposite. You could see the latest stuff, but you couldn't watch a full season early on. Hulu was free to use and it was also ads supported, but Kyler was also careful not to overload ads on episodes, which is something I wish other companies would practice. I'm not naming names, I'm not making any accusations about anyone specifically, but on a totally unrelated note, I am obligated to take another break to take our sponsors. We'll be right back. Okay, so we are back. And besides me being cheeky about ads, Kyler was very much aware of the effect ads have on viewership. He would later publish a blog post that would outline certain observations he had made while in the entertainment business, and one really big one was about ads. Specifically. He wrote in a memo that quote, traditional TV has too many ads. Users have demonstrated that they will go to great lengths to avoid the advertising load that traditional DV places upon them. Setting aside sports and other live events programming, consumers are increasingly moving to on demand viewing in part because of the lighter ad load end quote. To that end, Hulu typically limited ads to two minutes of advertising per half hour of content, which was far below what you would find if you were tuning in to live TV. For films, studios had the option to allow users in ad free experience during the film itself if in return, the users agreed to view ads up front before the film started. You've probably seen a message that was something like, thanks to our sponsors, you can watch the following presentation free of ads, or something like that. In that same memo in which Kyler pointed out the issue with ads, he also talked about how audiences were increasingly migrating to on demand viewing experiences. Traditional television requires viewers to watch on their schedule, not the viewers, So that's frustrating, right when you have to be available when the program airs. Technology started to allow for time shifting. I mean VCRs led the way, at least for those of us who are willing to learn how to set a VCR to record a specific channel at a specific time, which wasn't always user friendly or easy. Then we could watch the programming whenever we wanted to, not just when it was scheduled to air. More sophisticated methods like DVRs would make this far more easy and accessible, and audiences would respond to that. They really enjoyed the freedom that this represented. The era of must SETV was changing. We weren't necessarily glued to our couches on Thursday nights or whatever, and the arrival of on demand viewing made this even better. A service that let you select whatt to watch when you wanted to watch it without having to decide ahead of time, like without having to set a DVR or VCR a big deal. Hulu, despite a bumpy ride in development, was poised for great success. Sure, the media companies that signed on to be part of the project kept shifting around, which meant it was hard to predict what material would actually be available to viewers once Hulu went live, but it still set itself apart from both YouTube and Netflix. There were limitations, however. Typically Hulu would only have a handful of episodes available for viewing and would remove the oldest of those episodes while adding new episodes, so you might only be able to access the last few episodes of any given show, but you wouldn't be able to really dive into the entire history of a program. This was in an era in which Kylar was trying to establish Hulu and when companies were even learning which strategies would be viable, so like this was all very experimental. Everyone seemed to know that it would take time for streaming to shake out to become a sustainable model, and that this would mean that there'd be a lot of investment and trial and error in the early days, and that it would require careful thought to find a way to make streaming work long term on a financial level. That is. Meanwhile, the cord cutting apocalypse was kind of on the horizon. Now. It wasn't quite to the point where people were suddenly like severing their cable connections right out of the gate, but young adults who had spent more time consuming content online than through traditional media were less likely to become cable subscribers, and that meant that simply through attrition, the cable business was facing a crisis. So there was a healthy incentive in place for streaming platforms to figure it all out, and it really big incentive for traditional media companies to figure a strategy that worked, because if they didn't, they were kind of dooming themselves. In two thousand and nine, Disney would join the Hulu party. Literally, they purchased a stake in Hulu. Obviously, this was well before the Walt Disney Company would launch its own Disney Plus platform, so At this point, Disney, NBCU Universal, and NewsCorp each owned approximately equivalent portions of Hulu, and then you had ten percent left over for the investment company. Disney agreed to make available some of their older Disney films on the service, and they also chose Hulu as the home for ABC programming because Disney owns ABC as well as some of the originals that Disney had produced for the Disney Channel. Now, at this stage, Hulu was competing against a different streaming platform, and we're still not talking about Netflix here. Instead, we're talking about TV dot Com, which I had completely forgotten about. TV dot Com. I knew about it when it came out, but I hadn't thought about in years. But that was a company that CBS Corporation acquired in two thousand and eight because again CBS, since it wasn't a stakeholder in Hulu, wasn't exactly eager to allow these competing media companies to be gatekeepers for CBS materials. So instead they go out and they buy their own streaming platform. At one point, the partners behind Hulu had some of their programming on TV dot Com as well, but that would change when CBS took control and Hulu pulled all of its programs off TV dot com. The camps were starting to form around streaming, with no one wanting anyone else to be the dominant player or to be able to have leverage over them. The big networks continued their long standing rivalry, and pretty much all of old media was looking at Netflix with suspicion also YouTube. Even though YouTube, I would argue, wasn't really in the same space as the others, it was a hated rival among media companies because it was stealing a whole lot of eyeballs, kind of like the Corinthian in the Sandman comics. In twenty ten, Hulu introduced a subscription service called Hulu Plus. Now this was different from the Hulu Free service and that viewers would be able to access full current seasons of shows, not just the last few episodes. You could watch a full season at least the latest one. You couldn't necessarily watch every season of a Showers would also get earlier access to the latest episodes. Essentially, they'd be able to watch an episode when that show went to air on television, you could access it online if you were a Hulu subscriber. That subscription cost nine dollars ninety nine cents per month when it launched, and to the bewilderment of many, that service would still include ads supported content, so you're not paying to get ad free content, it would still get ads. Some folks asked why would there still be ads if you also had to pay a subscription, and the best answer seemed to be, we want money on that front. Twenty ten is also when Hulu planned to hold an IPO, or initial public offering. That's when a privately held company becomes a publicly traded company, but Hulu would in fact not go public that year. Ultimately, the stakeholders decided to keep it a privately held company, and there were rumors of a real IPO cropping up in late twenty twenty three, but as we will learn, that's not the path that the company, but he would ultimately take. One thing Hulu did fairly early on was to produce original content specifically for the Hulu platform itself, and this began in twenty eleven, which is two years before Netflix would do the same thing. So for the first few years, Hulu really just existed as a place where folks could go to watch recent television programs, and it was pretty handy if you happen to miss an episode of your favorite show, you know, if it was a show that was on a network that partnered with Hulu, at least you could potentially catch that episode starting the day after it originally aired, and you would also see fewer commercials than you would if you had watched it on television in the first place, which is not a bad deal. Before getting into the content game directly, Hulu also served as a place where web originals could find a home. So these were programs made by other companies but with the web in mind, as opposed to on traditional media. The first actual Hulu original was a show called The Morning After. This was a sort of pop culture roundup show. The first scripted series would come out in twenty twelve, and it was called battle Ground, which was a satirical political comedy series that the showrunners originally pitched as a TV show, but they couldn't find a network to pick up the series. Hulu provided an alternative pathway to find an audience. Hulu would increase its focus on original content, and this gradually meant that the original strategy of providing access to broadcast TV would start to decline in importance, and another shift was coming as well. Jason Kyler, who had led the company from when it was still taking shape in two thousand and seven, announced he would be resigning from the company in twenty thirteen. Now, under Kyler's leadership, Hulu had gone from this nebulous idea that the industry in general predicted was going to be a colossal failure and had created a business that had an upward revenue trajectory that was pretty impressive. For example, the Hollywood Reporter said that in twenty twelve, Hulu posted a sixty five percent increase in year over year revenue. However, percentages never tell you the full story, right Because if I gave you a dollar today and then tomorrow I gave you two dollars, that's a one hundred percent increase day to day. But that's still just two dollars or three dollars total. However, that being said, the twenty twelve revenue was six hundred and ninety five million dollars, which is not chump change or you know, clown company dollars, I guess. Also, by this time, the stakeholders had been whittled down to news Corp, NBC, Universal, and Disney because the three other stakeholders had bought out Providence Equities stake for around two hundred million dollars according to Bloomberg. Now, remember when Providence first invested, they were taking like one hundred million dollar equity steak in Hulu, so they essentially doubled that, which is not bad. Kylar wasn't the only executive leaving the company at that point. Another was the chief technology officer for Hulu, a guy named rich Tom, which you know, that's a great name. Oh you mean rich Tom. The rumor mill said that Kyler's decision was one fueled by frustration he had with his corporate overlords, that that Kyler had really wanted to secure more licensing deals in order to feature a wider spectrum of programming on Hulu, but that he was being stonewalled by the various corporate stakeholders and denied these. These budgets and licensing fees were growing pretty hefty, and this was largely because Netflix was pouring buckets of cash into its own strategy. And we'd get back to the conundrum that the media companies were in, so in an ideal world from the studio perspective, not the audience perspective. But if you're a studio, the ideal is that you would have your owned and operated streaming service specifically for your studio's output. And of course, as we go down the timeline, that's kind of what would happen, right, because we would get a bunch of platforms, ridiculous ones. You know, you look out there and you've got your your Peacock Paramount plus, CBS All Access, HBO Max. All of these would start to pop up many years further down the line, so we would see this kind of come to pass. But that's something that all these studios wanted early on. They just didn't have the infrastructure. They didn't invest in building that out. So back then, back in twenty thirteen, there were only a few options open to you. If you wanted to make your material available for streaming. You could sign on with Netflix, or you could sign on with Hulu. Anything else was seen as being a little too obscure to make much sense, like it just wouldn't be a good return on investment. And if you didn't sign licensing deals, well then you were leaving money on the table. So while studios weren't keen to turn a service like Netflix or Hulu into a gatekeeper. There weren't a lot of alternatives, and with Netflix willing to shell out crazy amounts of cash for licenses, it meant that Hulu was losing out. Now, as we would see, this isn't an episode about Netflix, but Netflix's strategy would ultimately be to invest more and more in original programming and kind of wean itself off of making these big licensing deals, which suited the studios fine because they would prefer to not have their stuff on Netflix if they could have it on their own platform anyway. The other big rumor behind Kyler's departure was that he was still focused on growing the business and his corporate overlords were hoping that he would switch more to a near term profit model. These two things are not always in alignment, right, because to grow often it means you have to spend more money, invest more. You're not going to see as big of a return. The folks who were owning the stakes were getting itchy. They wanted profit, and it also sounds like the various stakeholders were at odds with one another over how to even achieve the goals that they had, Like even when they had goals that were in common, they disagreed with how they should go about achieving those goals, and that put Hulu in kind of a corporate ug of war between the different stakeholders. So I wouldn't blame Kyler for a moment if that contributed to his decision to step down. I've been in corporate tug of wars in the middle of one, and it is the most frustrated I think I've ever been professionally. Anyway, it sounded kind of like the board level of Hulu was turning into what naysayers had been predicting back in the Clown Company days, right Like, it sounds like that's what was coming true. I already mentioned that Kyler would go on to co found a different video streaming site similar in some ways to YouTube, and that Verizon would subsequently acquire and then later shut down that website, and that Kyler then went on to become the CEO of Watermedia under at and T. Interestingly, in twenty sixteen, Time Warner, which would later become WarnerMedia, acquired a ten percent steak in Hulu. So again, those worlds would intersect a couple of times. I've said, like the corporate overlords of Hulu. The partnerships have changed over time, so at one time Warner was one of the owners. When Kyler announced that he was going to depart from Hulu in twenty thirteen, the company had yet to announce a replacement, and in fact, it took a little while before that would happen. It was a luxury that a privately held company can enjoy, I guess because if you're a publicly traded company, succession planning is something that investors take very seriously see also Disney. But eventually Hulu announced that Andy Forcell, who had been senior vice president of content at Hulu since two thousand and seven, would take on the job as an acting CEO. He would not be on that job for long. He would actually leave Hulu in late twenty thirteen. That's the same year that Kylar stepped down. So we're talking one year two different CEOs, really three, because the third one would take over after Forcell would leave, And interestingly, Forceell's journey would take him on to become the chief operating officer at Full Screen and then Ottermedia. Now, if you listen to my episodes about Rooster Teeth, those companies were going to sound familiar. He was part of that whole thing, and then ultimately would end up becoming the head of HBO Max over at WarnerMedia, which meant that once again he'd be working under his old boss, Kylar, who was the CEO of WarnerMedia at that time, and just like in twenty thirteen, Forceel would leave WarnerMedia around the same time that Kyler did after AT and T divested itself of WarnerMedia and sold it to Discovery. So time is a flat circle. Mike Hopkins, who had been president of Fox Networks Group, was then tapped to be CEO of Hulu, and this capped off an era in which many of the leaders who were part of the original team who built Hulu had at this point left the company. Reportedly, this had a pretty negative impact on employee morale. Hopkins would stick around for four years and provide some leadership stability at a time when it was sorely needed in the company. He would eventually leave Hulu to become chairman of Sony Pictures Television, and then after a couple of years of doing that, he would go on to join Ammazon on and became a senior vice president for Prime Video and Amazon Studios. But anyway, Hopkins takes the helmet Hulu, you might wonder what else was going on during his era as CEO, which went from twenty thirteen to twenty seventeen. That is what we're going to start to cover in the next episode, along with the story of where Hulu would go from there and how the company would reach where we are now, which is in this weird limbo because of a disagreement between Disney and Comcast over how much the company is actually worth. We'll touch back on that later this week. In the meantime, I hope you are all well and I'll talk to you again really soon. Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.