Can Hulu Take on Netflix?

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July 15 (Bloomberg) -- RBC Capital Markets Managing Director David Bank discusses the outlook for Hulu with Erik Schatzker on Bloomberg Television's "Market Makers." (Source: Bloomberg)

Ultimately do you believe led to the conclusion that they should keep it?

First of all, we have to give a lot of credit, strategically, to bob eiger and rupert murdoch for not selling this asset.

The pressure existed to create a competitor to netflix and amazon, to make sure that there is a nether buyer for content in the system.

In the short term and independently funded buyer probably could have helped earnings in the near-term.

That was really a key driver.

That and the fact that it was a joint venture, those things are difficult to manage.

What they did was they decided that in a sense the earnings benefit in the short term , from having a nether independent owner, was not important enough to overwhelm the long-term strategic value of this brand.

I give them a lot of credit for that.

What do we do now?

Now we are at a new generation of television consumers.

It really does not mean a whole lot.

What hulu represents to me is the brand of television that brings the consumer into television, not just from a content perspective but how do you interface with television?

Do you want to log in to a bunch of different apps?

You can go to a white label hulu and that brings you to television.

That is a big part for me.

How does hulu tap into that and do you like the idea of partnering with time warner cable just to access more content for hulu?

I think it is a terrific partnership area the more pay- tv partners, the better it becomes because it will be an -- the better it becomes a global authentication platform . it is going to be better funded.

It is certainly a promising business.

I think they have plans for that business.

There is so much value to this platform and that is why i am so encouraged that these big companies are holding on to it.

They have agreed to sink $700 million into the project?

What is that going to get them?

Is that going to get them to do what they want?

I think at the end of the day you have to scale the amount of content relative to the amount of subscribers you have created it is a chicken and the egg kind of thing.

$750 million, if you think about that as an annual run rate or budget, it is probably about where netflix was two years ago.

I do not know what the total budget number is.

I think it is encouraging that they are funding it with that much money incrementally.

I think it is a very encouraging sign.

It is probably not enough to compete with a service.

It is enough to keep the momentum going.

It is enough to get the competitive landscape that jon erlichman paid for us.

Should they be scared for what the new hulu is?

The reality is in the near- term they should be best -- they should be less scared.

An independent buyer would probably come in and compete more aggressively in the near- term.

And the longer term they should definitely be more scared.

Netflix and amazon try to move into that space and define television, disrupting the echo system.

That is going to be much tougher for them with the existing players owning hulu.

This text has been automatically generated. It may not be 100% accurate.

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