US on-demand service Hulu can be a viable alternative to OTT market leader Netflix, the president and COO of 21st Century Fox has claimed.
The comments come after Fox Networks Group distribution president Mike Hopkins became Hulu’s new CEO last month and after a second failed attempt by its broadcaster parents to sell the business earlier this year.
Chase Carey (left), who was part of the team that appointed Hopkins, told analysts: “We think there are real opportunities in the digital space to both create something that can be a real positive for us [with] the existing distribution ecosystem, as well as a platform that competes – in its own way – with Netflix and the likes of the world in creating an alternative in that digital space.”
Hulu parents Fox, Disney and Comcast attempted to sell Hulu to a number of buyers such as DirecTV, AT&T, Qatar Holding and Time Warner Cable earlier this year for around US$1 billion but were unable to reach an agreement.
Instead, they decided to plough US$750 million of new capital into the service to strengthen its technology and content.
This subsequently lead to Hopkins’ hire and the departure of interim CEO Andy Forrsell, who had held the role since former chief exec and founder Jason Kilar left earlier this year.
Hulu offers premium broadcaster content, acquired series and, increasingly, original series but has struggled against Netflix, which has market penetration in the US of about 38%. In comparison, Hulu reaches about 18% of Americans.
The news comes as 21st Century Fox announced fiscal fist quarter profit had dipped sharply year-on-year to US$1.3 billion compared with US$2.2 in 2012. However, revenue grew 18% to US$7 billion, while revenue at the company’s cable TV channels business up 12% to US$2.8 billion.
The profit drop was attributed to costs of launching new cable nets Fox Sports 1 and FXX.
The company’s filmed entertainment unit, which includes both TV and film, posted a 24% decline due to the movie business, while the TV production business saw sales of shows such as New Girl help revenue grow 9%.