How Hulu is becoming a testbed for new TV shows

Shows produced by Hulu will soon find their way onto traditional TV networks in the U.K. and elsewhere, thanks to a distribution deal between the TV catch-up site and Fremantle Media. The deal, which was announced Sunday night, gives Fremantle an exclusive first look at shows like Morgan Spurlock’s documentary series A Day in the Life, which Hulu is bringing back for a second season on Monday. It’s an interesting business proposition for Hulu, and it further establishes the site as a testbed for new TV content.
Under the agreement, Fremantle will be able to distribute Spurlock’s show and others worldwide, save for the U.S. and Japan, where Hulu has its own services up and running. Fremantle’s senior VP of acquisitions Jeff Tahler told me via email that the English-language markets such as the U.K., Australia and New Zealand could be good homes for Hulu content. “But we expect to sell well beyond those,” he added.
Fremantle is getting the rights to distribute the content across all platforms, but Tahler said that TV is a good fit. “The content we are acquiring is not short form, and mirrors in format and quality what you would expect to see on TV,” he said. That sentiment was echoed by Hulu’s SVP of content Andy Forssell, who told me during a phone conversation last week that this validates Hulu’s approach toward original content. “It has got to be as good as what was on TV last night,” he said.

Battleground, Spurlock, Linklater

Hulu has aggressively expanded its original content line-up in recent weeks. The site launched its first scripted original show Battleground in February. Spurlock’s show is part of 30 documentaries that will come to the site later this year. And this summer, Hulu will premiere a travel series called Up to Speed,  filmed by Richard Linklater. The move coincides with similar initiatives by Netflix(s NFLX), which is spending heavily on original content as well.
But while Netflix is buying shows like Lilyhammer and House of Cards to compete with pay TV networks like HBO(s TWX), Hulu is trying to make the case that its original content initiatives work for, not against, traditional TV networks. Hulu is owned in part by NBC parent Comcast(s CSCMK), ABC parent Disney(s DIS) and Fox parent News Corp(s NWS), and Forssell said he doesn’t think there is a lot of friction between broadcasters and Hulu originals. The idea of limited screen time, which could somehow result in Battleground viewers watching less network TV on the site, is a myth, he argued: “I don’t think it works that way.”

Finding audiences on Hulu, expanding to TV

Instead, Hulu hopes to establish a different pattern: The site could become a kind of testbed for pioneering content like Spurlock’s show that then gets picked up by traditional TV networks. A Day in the Life isn’t the first show to make this transition: Hulu secured the exclusive U.S. rights for the dark superhero comedy Misfits last summer. The show quickly took off on Hulu and became the most-viewed show on the site for several weeks in a row. Its success on Hulu played a big role in the decision to adapt the show for U.S. audiences.
This kind of testbed role is also one reason why Hulu isn’t insisting on worldwide exclusivity — and the flip side is that the site can actually generate revenue in markets where it isn’t present yet. That revenue can then be funneled back into original productions. “It makes more money for our producers, and it helps us to make more (original content),” Forssell said.
Forssell refused to elaborate on how much money Hulu is spending on original content, characterizing the budget for these kinds of shows and movies as currently “very modest.” However, the site could ramp up its production budget if opportunities present themselves, he said, arguing that the bigger issue currently isn’t actually the money. “The limiting factor is quality,” he said.