ABC, Fox, NBC Seize More Control Of Hulu Ad Sales (EXCLUSIVE)

Network owners of Internet vid giant want more say over blurb placement

Hulu’s three TV-focused owners are taking more control of the streaming-video site’s ad sales, another sign of the tension that sometimes flashes between the popular video hub and the media conglomerates that control it.

SEE ALSO: DirecTV Mulling Hulu Bid

As part of a new agreement, ABC, Fox and NBC are to retain control over as much as 90% of ad inventory attached to current-season programming, or new episodes of shows on their network, according to people familiar with the arrangement. One of these people suggested the policy is to go into effect starting with the new TV season this fall. Hulu would retain control of ad sales associated with so-called “library”content, or old shows that once appeared on ABC’s, NBC’s or Fox’s air. The TV nets’ parents – Walt Disney, NBCUniversal and News Corp. – all own stakes in Hulu.

The arrangement is apparently a flip of sorts: Hulu once controlled the majority of ad sales associated with current programs. Indeed, in 2010, Fox’s then-head of ad sales, Jon Nesvig, described a process in which Fox was able to purchase Hulu ad time that it could then sell to its own sponsors.

Now, things have changed. When it comes to ABC, for example, the ABC ad sales team is to become the lead for current series inventory in ABC programs on Hulu, according to a person familiar with the Walt Disney network’s arrangement. Hulu’s sales team will retain control of about 10% of ABC’s current-series inventory with Hulu for inclusion in “run of site” ad packages offered to sponsors, this person said. And Hulu will also represent inventory in older series available on Hulu that may have originally appeared on ABC.

The new control is clearly something ABC and its partners want. During an upfront presentation last week, Geri Wang, ABC’s president of ad sales, touted the new arrangement with Hulu, noting the appeal ABC oversight might have for sponsors looking to place ads with ABC programs appearing across different media venues. One person familiar with the situation said the three networks were increasingly interested in having more control over Hulu ads at a time when viewers are sampling video in new ways and more advertisers are asking for broader packages that include traditional TV as well as digital and mobile streaming.

ABC and NBC said executives were not available for comment. Fox was unable to respond to queries seeking comment.

Hulu expects to retain a “meaningful percentage” of ad inventory on the three networks’ programs, according to a person familiar with the company. Hulu’s ad sales team will still sell the majority of ad inventory across the site’s 470 content partners. A Hulu spokeswoman said executives at the company declined to comment.

Hulu has clashed with one or more of its owners in the past. In 2011, Fox pushed the site to add more commercials to its streams – a maneuver that stood to benefit the News Corp.-owned network but threated to tarnish the sleek aesthetic Hulu built. The site typically runs far fewer commercials in each of its ad breaks than do its TV-network masters.

In 2010, Fox used some of the Hulu inventory it controlled to offer sponsors so-called “make goods,” or ad time given to sponsors when a show falls short of previously promised ratings guarantees. The move had the potential to undercut Hulu’s own ad-sales efforts.

Hulu has been one of the big success stories in online video. At a recent meeting with advertisers in April, executives noted the site crested 4 million monthly premium subscribers in the first quarter, wihle streaming more than 1 billion videos in that period.

The networks’ efforts to wrest more control of the advertising comes as speculation increases that Hulu could be sold. Disney and News Corp. have hired Guggenheim Partners to explore potential options for the site. NBCUniversal cannot be involved in management decisions for Hulu under terms of the U.S. government’s approval mandated when NBCU parent Comcast took a majority stake in the conglom. Time Warner Cable and DirecTV have surfaced as potential Hulu suitors in press reports.

More Biz

  • John FordNPact Awards, Show, Los Angeles,

    John Ford to Exit as Head of Unscripted Producers Trade Association NPact

    John Ford has stepped down as general manager of NPact, the trade association that represents unscripted TV producers. Ford is exiting the post he’s held since 2015 because of the potential for conflicts of interest arising from his role as head of programming for digital multicast outlets Justice Network and Quest Network. The channels were [...]

  • Woodstock 50 Applies for Vernon Downs

    Woodstock 50 Applies for Vernon Downs Permit Yet Again

    For better or worse, Woodstock 50 isn’t giving up on Vernon Downs, despite being rejected twice already: The producers have applied for another permit to hold the festival at Vernon Downs, according to the Utica Observer Dispatch. Town Attorney Vincent Rossi confirmed the application was submitted Wednesday. This is the festival’s third application; previous applications [...]

  • Bert and Ernie

    Sally Field, Linda Ronstadt and 'Sesame Street' Among 2019 Kennedy Center Honorees

    Sally Field, Linda Ronstadt, “Sesame Street,” conductor Michael Tilson Thomas and R&B veterans Earth, Wind and Fire have been selected as the 2019 Kennedy Center Honorees. The kudos will be handed out Dec. 8 at the Kennedy Center Opera House in Washington, D.C. The award to “Sesame Street” marks the first time the prestigious laurel [...]

  • Jeffrey Epstein

    Jeffrey Epstein Denied Bail in Sex Trafficking Case

    Jeffrey Epstein, the high-living financier who partied and traveled with Hollywood stars and world leaders, has been denied bail. The multimillionaire businessman is accused of sexually abusing underage girls as young as 14 years old and collecting child pornography. Prosecutors argued successfully that Epstein’s wealth made him a serious flight risk. He faces up to [...]

  • AWAL Names Bianca Bhagat as Senior

    AWAL Names Bianca Bhagat as Senior VP, Synch & Brand Partnerships

    AWAL, Kobalt’s recorded music company, announced the hiring of Bianca Bhagat as senior vice president, synch & brand partnerships. Based in Los Angeles, she will oversee AWAL’s global synch & brand partnerships team, pursuing creative marketing opportunities for the AWAL roster, according to the announcement. Most recently with Glassnote, leading the Film and TV department [...]

  • iheartmedia logo

    iHeartMedia Stock Drops in NASDAQ Debut

    Shares of iHeartMedia, the U.S.’s biggest radio network, fell as much as 7% after they commenced trading Thursday on the NASDAQ Global Select Market, and ended the day down around 3%. Last month, after exiting a year-long bankruptcy reorg, iHeartMedia announced it was approved for listing on NASDAQ, instead of pursuing an IPO. The company’s [...]

  • Netflix Reed Hastings

    Netflix Shares Dive After Q2 Stumble: Just a Hiccup or Sign of Bigger Trouble?

    Netflix badly undershot its subscriber forecasts for the second quarter of 2019 — posting its first net U.S. customer decline since 2011 while growth slowed considerably overseas. The company added 2.7 million subs worldwide, almost half as many as the 5 million it had projected. With the big miss, Netflix shares took a predictable hit, [...]

More From Our Brands

Access exclusive content