Hulu’s Future Is up in the Air: Comcast Corporation (CMCSA), The Walt Disney Company (DIS), Netflix, Inc. (NFLX)

I often give Netflix, Inc. (NASDAQ:NFLX) a hard time, pointing to its easy to mimic business model and rapidly growing list of competitors, but it seems one of its better known threats is at a crossroads. According to Bloomberg and the Wall Street Journal, rival Hulu’s future is being discussed by two of its three owners. The online site is owned by News Corp (NASDAQ:NWSA), The Walt Disney Company (NYSE:DIS), and Comcast Corporation (NASDAQ:CMCSA), but Comcast Corporation (NASDAQ:CMCSA) is not permitted to participate, as it forfeited its operational rights when acquiring NBC Universal.

Comcast Corporation (NASDAQ:CMCSA)Hulu has struggled for direction under the influence of multiple parent companies, so at some level this could be a boost for the company, but it would come at a cost. If either partner were to sell off its interest in the company, you can expect its content to either disappear from the site or become much more expensive. It may be a cost worth paying since it would at least help the company pursue a single direction rather than trying to appease two masters.

When Hulu CEO Jason Kilar gave an interview to Fast Company back in October pointing to the difficulties of running the company, ownership played no small part. The Walt Disney Company (NYSE:DIS) has been a major supporter of the ad-supported aspect of Hulu, while News Corp has pushed the subscription model. Add in the executive changes that occurred across the three companies and you have a volatile mix of egos, ideas, and wants. That may be part of the reason Kilar and CTO Richard Tom are leaving the company sometime in the first quarter of 2013.

There have been signs that the parent companies have been looking for ways out, or at least planning for a future in which they were no longer responsible for Hulu’s wellbeing. In December The Walt Disney Company (NYSE:DIS) signed a deal with Netflix giving it access to its movie library and new releases starting in 2016. Netflix, Inc. (NASDAQ:NFLX) will be paying Disney $350 million a year for the privilege. While Disney was previously locked up with Liberty Media, the fact that they opted to make a deal with Netflix rather than propping their own partnership is telling.

Without a doubt Netflix and, Inc. (NASDAQ:AMZN) are watching carefully, because any material change in Hulu could turn into a big opportunity. While Hulu’s 3 million subscribers pale in comparison to Netflix’s 27 million domestic subs, the company satisfies a niche that Netflix, Inc. (NASDAQ:NFLX) doesn’t. Amazon’s numbers are harder to peg down since it doesn’t sell a standalone subscription service, but the company has been investing heavily in its streaming unit; it isn’t a stretch to expect it to care about Hulu. Thanks to Hulu’s parent companies it also holds content rights neither can get their hands on, unless something changes.