Hulu’s dithering is rocket fuel for Netflix
Netflix’s share price almost hit a giddy $26o on Friday as it became clear that Hulu was not going to be acquired by DirectTV or Time Warner. The company’s market cap is now nearing $15 billion, driven by what is widely regarded as a deeply irrational investor mania. But is Wall Street’s infatuation sheer lunacy? At the moment, Netflix is miles ahead of the other streaming video rivals when it comes to creating original content. Its latest show, “Orange is the New Black,” may be a quirky niche item, but it has topped 80% on Metacritic and is garnering some rave reviews from influential media mavens. Netflix is putting together a roster of ambitious high-profile shows that appeal to very distinct demographic niches. “Orange” is designed to basically grab the “Weeds” demo of 30 to 50-year-old professional women, “House of Cards’ ” audience’s average household income likely tops $100,000, and the upcoming Dreamworks animations are going to be catnip for families with kids under 8 years old.
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Bit by bit, Netflix is cobbling together a quilt of original programming that defines it as something upscale, despite its relatively tiny monthly subscription price. Building a full roster of programming that appeals to a range of different viewers takes a long time — and that is why it’s awesome for Netflix that Hulu cannot seem to find a clear programming vision.
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Disney, Fox and NBC may have pledged $750 million in new financing for Hulu. But that motley crew of current Hulu owners is highly unlikely to sign up for expensive, adventurous projects like the $100 million “House of Cards.” To take on Netflix as a programming powerhouse, Hulu would need one strong hand on the steering wheel, as well as a willingness to start spending like a drunken sailor.
That is now unlikely to happen in the near future. And as a result, Netflix is probably going to remain unrivaled when it comes to splurging on expensive new programming featuring major franchises, directors and actors. This is going to be a serious headache for Hulu and Amazon, both of which seem unable to commit to a series of big-budget shows.
Hesitant and dithering rivals that dip their toes into content with a couple of low-budget shows is exactly what Netflix needs to draw a clear contrast with its ambitious slate.
This article was originally published on BGR.com
