This WSJ story on Hulu’s new content arrangement with its parent companies is just another clear indicator of how perceived value of content is changing.

Now, studios/broadcasters see their re-runs as freshly valuable commodities. With the price point being set by Netflix, the value of all second-run content is rising. So after eliminating most of what would have been network re-runs in recent years, the internet delivery of said re-runs is turning out to be worth more than the ad revenue a site like Hulu can earn to share with the content owner. In other words, ABC.com can generate similar levels of advertising revenue in-house… or more enticingly, can get a Netflix or another new competitor of Netflix to pay a premium for the content as bait for whatever business they want to build.

After a week or ten days or two weeks, the content could go up on Hulu and/or a parade of streaming syndicators who are willing to revenue share.

As with the film business, it’s all about getting the maximum revenue out of whatever piece of content being discussed. None of these companies care about where the shows play or how many people see them. It’s about more payments for the same thing.

So a tv show window might now be 1. ABC/NBC/CBS/FOX, 2. a week on the network’s website only, 3. 3 months on Hulu and a variety of subscription sites, 4. DVD/digitally delivered ownership, 5. annual deals for Netflix. How much can each window deliver in dollars? Which window is worth more as an exclusive or a non-exclusive? Can more windows be created to add more revenues? For instance, what about phone streaming exclusivity?

This issue manifested itself in the print media world recently, as Conde Nast decided to include iPad access with New Yorker print subscriptions. David Carr at the NY Times wrote about this is a though it devalued the property. Perhaps it was because the NY Times had decided that their iPad app access would be quite expensive, charged at the price of a full delivery subscription or given away as a perk with a full delivery subscription. A delivery subscription for New Yorker is about 50 bucks… NY Times, over $400 a year.

I don’t really understand why The New York Times thinks anyone would pay a massive premium for an iPad app (much less a mediocre one), but that is one philosophy. And at The New Yorker, another. Which is right? There may be a different answer for different outlets. But either way, only time can tell.

How long will it be before using your DVR becomes more expensive? Or your cable/satellite provider agrees to built in some kind of gimmick that disallows skipping commercials, like Hulu? What is the right price point for a re-run? What is the right price point for a new episode’s premiere?

Studios are well ahead of the public in recalculating how the future revenue streams will be balanced. And except for those who own cable companies, none of them care how these film entertainments are delivered to you. It’s simply a matter of maximizing revenues.

The problem for Hulu is that they have no way of knowing which direction ownership might go next. They need to be able to choose a direction. Are they a business about re-runs and selling ads on them? Are they a general entertainment channel? And how much will they risk… how much reward to they foresee? Netflix has thrown hundreds of millions of dollars a year into leasing streaming content. Is Hulu the place that wants to suck up all the content that Netflix does get… the other side of the coin, so a consumer who wants to see “everything” needs to subscribe at those two places? Or does it want to create a more narrow, more specific niche?

One thing that is crystal clear… the goal of all this is not to make content less accessible to the public. It’s to make it more accessible… but to get paid… paid in ways that seemed impossible just 2 years ago.

The long game issue is that there is a nearly finite amount of money at the which the public will spend. So everyone who now wants to get paid in the digital age is going to have to figure out how to get their piece of the pie,… and not be so greedy that thy end up with nothing.

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