Brian Stelter and Amy Chozick make the case on the New York Times' Media Decoder blog that Jason Kilar's exit from Hulu had a lot to do with the suits who own TV networks:
Mr. Kilar’s announcement did not come as a complete surprise. At times during his tenure he has clashed with the owners on Hulu, exemplifying the divide between new, disruptive modes of distribution like the Internet and the more traditional operations at major media companies. As the owners pulled back on the amount of ABC, Fox and NBC programming it provided to Hulu, the Web site invested in original, made-for-the-Web programming to fill the gaps and attract attention.
The last time it looked as if Kilar would exit Hulu, it was when Yahoo was coming off an executive scandal, with activist shareholder Dan Loeb of the hedge fund Third Point agitating for both board-level and CEO changes.
If Yahoo is the most Hollywood of Silicon Valley companies, with a major presence in L.A., then Hulu is one of the most Silicon Valley of Hollywood undertakings.
But Kilar did find himself precisely at the intersection of the battle for the future of entertainment that's being fought by Hollywood and Silicon Valley — Big Content and Big Tech. California's two marquee industries are having a lot of trouble getting along. Which is understandable, given that they have incompatible business models.
Hollywood wants people to pay for content. Silicon Valley wants content to be as close to free as possible, so that it can fill the platforms it creates with as much high-quality entertainment as possible...without actually having it affect the bottom line. Silicon Valley is all about funding rapid growth. And nothing cuts into rapid growth quite like copyright.
Hulu is based in Los Angeles and owned by NBC Universal, Fox, and Disney. (A private equity firm, Providence Equity Partners, holds a 10 percent stake.) It's one of the best examples of Hollywood trying to develop a way to adapt its business model to Silicon Valley's.
But if Kilar's struggles are any indication of how that adaptation will go in the future, anyone who tries to manage the transition from the old way of distributing entertainment content to the new one is in for a bumpy ride.