So today, Viacom pressed its case against Cablevision as regards the portable app that basically extends the cable experience to your portable device… for free.

We are seeing the same thing, again, and again, and again. Content value has been reinvigorated by streaming and more specifically, Everything Everywhere delivery options. Personally, I don’t believe this revenue stream will ever replace The DVD Bubble, but none of these companies want to take that chance. After all, whatever the revenue options are and will be, maximizing that opportunity is the best any company can do.

There may, indeed, be a loophole in the contract. Apparently, Cablevision is counting on this holding up. In a release, back when this fight started in April, they offered, “Cablevision has been serving customers with switched digital cable for more than five years. Advanced Digital Cable allows the company to switch in multiple digital formats, as its customers continue to buy the latest display devices.”

I don’t have the contract and I am not an expert in the nomenclature of cable rights. Like the unlikely-to-be-renewed-as-is relationship Starz, Netflix and the content creators, Sony & Disney, these deals look a lot different in the light of new technologies.

Meanwhile, Viacom has recently sold streaming rights to Hulu… though some shows, like South Park, are still streaming on Netflix as well. They also sell episodes on iTunes. They also give away the episodes for free at the SouthParkStudios.com site, which is loaded with ads for Paramount movies and The Book of Mormon.

Point is, it’s their content and they will monetize it – or not monetize it – if they like and how they like.

If, somehow, Cablevision had started this program before Netflix made their deal with Relativity and EPIX, the studios would have probably let it pass – for a while – just to see if there was any real interest out there… any money to be made. But Netflix and Hulu and others have made it clear… there is money there… so f*** “free.”

It’s not like Cablevision isn’t in a similar boat with their own content. They are spinning off their cable networks – AMC, WE TV, IFC, Sundance Channel and IFC Films – into its own company, hoping to raise the value of this group of businesses by disconnecting it from the cable business. Lionsgate just sold rights to Netflix to stream Mad Men for about $1 million an episode. I wonder how they feel about madmenepisodes.com, which streams those episodes for free… illegally.

Speaking of Hulu… I keep reading dumb, myopic stuff about Hulu on the web. The idea that Hulu was some grand idea gone wrong is just missing the reality. Netflix changed the game from, “Let’s get the reruns off our networks and slowly build a streaming business” to “Hey… those guys are paying a ton of money for the reruns and old movies we thought we squeezed every last dime out of… let’s take their money.” This all happened a year ago, not in 2008, when Hulu was created.

It is completely fair to say that the value proposition of Hulu, getting reruns and great library content, on any device at any time, is often thwarted by too much of the new content at Hulu not being available at Hulu Plus. The assumption of most – me included – was, I think, that everything that was on Hulu would be on Hulu Plus, streamed, for $8 and now, $7 a month.

Worse, the series that are available on Hulu and not Hulu Plus seem random and unpredictable. Food Network Star… not on Hulu Plus? The View? Are they saving it for a DVD box set? 30 Rock, yes. Community, no? Huh? Etc, etc, etc.

I would watch USA Network shows on my iPad now and again… maybe even pop them up on the TV via the PS3 and Hulu Plus. But I have almost no interest at all at watching them on my computer.

So, yes, there is a problem with Hulu Plus. The same is true of Netflix… but Netflix has a much bigger base of product, they offer DVDs, and most importantly, Netflix is not perceived as a victim of its limitations. Hulu-Plus is. And it’s not unfair.

That leaves the ad business on Hulu, which is quite healthy, actually. But the bottom line remains the bottom line. This market is in its infancy, but one player is paying premium prices for everything they buy. The #2 player was created to carry the water of three studios… but isn’t being allowed to do so, in part because of the #1 player raising the bar of content costs.

This all is very much like the studios in the indie business. They saw the opportunity. They ate it all up. And then, when the competition amongst Dependents was raised up and over the $20m a movie bar by John Lesher and Paramount, real money could be lost… and it wasn’t so exciting. Moreover, when the divisions were successful, but still weren’t as profitable as a single comic book movie could be each year, the bloom was completely off the rose.

You have to know what your business is and what is realistic to expect of it, if you want to succeed. There is no reason why Hulu can’t continue to grow and thrive. But the likelihood that it will throw $1 million an episode off… ever, much less right now… based primarily on ad sales, is about zero. But Netflix isn’t going to do that for many shows either. And when you get down to the mid-range and low-interest shows, Hulu will probably be competitive.

If Hulu can ever get their owners, NBC, Fox, and ABC to agree to put everything on Hulu and Hulu Plus for 2-4 weeks after airing with some material remaining available and some not, Hulu Plus will be competitive with Netflix on subscriptions.

If I can watch Glee on Hulu Plus, but not So You Think You Can Dance, something is seriously f-ed up and word of mouth will suffer.

But the basic question, “What is Hulu worth without programming?” is simply idiotic. What is Netflix worth without programming? What is you local tv channel worth without programming? There is no specific thing Hulu NEEDS to be in order to be of value. It just needs to be BE something specific that can be sold. Hulu extended to your iPad and phone was a great notion… but it’s not true right now.

In the end, everyone – and Netflix is absolutely included in this – has to pick their spots.

Obviously, someone could buy Hulu and waste the value it does have. Obviously, the 3 studios that own Hulu, are not clear on what they want it to be now.

But just as the market for indie is more wide open than ever, with the bigger studio money sucked out of the equation to a great degree, there is the opportunity to take advantage of the situation. That doesn’t mean that you’re going to find a $100 million grossing indie in your first year. But there is a very nice business to be done on smaller films with smaller price tags that will make a profit.

If you have to be Searchlight overnight, you will soon be out of business. But if you want to build a business… a real business… and you have some money, there is plenty of room to not only survive, but to thrive. Same with Hulu.

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