The Hulu IPO: Wrong thinking on intangibles accounting hurting its chances

The internet television video company Hulu is reportedly considering an IPO. But, reports the NY Times, the company “evidently makes little in profit.”

I am not privy to their numbers but I can tell you from experience that their income statement is probably full of “expenses” that are actually investments in their intangible productive capacity (also called intangible capital). These include investments in some investments in processes, training, networks, and other forms of organizational knowledge. Read more

Hulu and the Value of Professionally-Developed Content

Neil Wilkof provides a great discussion at the IP finance blog here of the business models of video production.

For those of you not familiar with Hulu, it is an on-line site that broadcasts a lot of current and old television shows on a small screen in your browser. I found out about it last fall when a writer friend of mine declared proudly in one moment that she doesn’t own a TV and a little while later she updated me on Jon Stewart quips from his latest shows…

Anyway, Neil contrasts Hulu with the limits of the YouTube model. The lack of consistency of user-generated content makes it harder to get advertisers on YouTube. Hulu is only presenting “professionally-developed” content. This makes it easier to get advertising.

His presentation adds a lot to my recent musings about Hollywood and newspapers. Both of these industries are professionals at creating content. Yet both are having problems with their business models. No easy answers.  But I remain convinced that the right answers will come from moving from a perspective just based on the content and looking at the intellectual capital elements–and re-assembling them in a new model.