OK, bad pun.

But the rumors suddenly swirling around the potential sale of Hulu to an as yet (as of this date) unnamed suitor reveal a deep and ongoing generational chasm between old media and new media.  Sadly for old media, while we all understand how tough it is to turn a supertanker around, Disney, Comcast and News Corp selling their stakes in Hulu is exactly the wrong move at the wrong time.

We all have a front row seat at the bar-room brawl that is the media business in 2011.  In one corner, the barons of Old Media – the Ruperts, Sumners, the feisty Jeff Bewkes of Time Warner, and the (for now) low-profile but deadly Brian Roberts of Comcast.  In the other corner: Netflix’s Founder/CEO Reed Hastings, Larry and Sergey from Google, patriarch Steve Jobs, and the other new gen entrepreneurs who are not afraid of where the business is going, including (in a fascinating case of the puppy taking a bite out of its master(s)) Jason Kilar at Hulu.  No wonder Old Media is upset: streaming content distribution is up-ending their revenue streams, pressuring them to release content to post-theatrical platforms earlier and earlier, and at cheaper and cheaper prices. 

The MPAA and NATO are panicking because they don’t know how to replace revenues lost not to piracy, but to newer legitimate commercial content platforms, like Netflix, or ad-supported platforms like YouTube. This is, I believe, a better explanation for the brinksmanship between Old Media and New Media companies over the now-tabled SOPA/PIPA legislation: it’s not really about piracy, but about which business models are going to be successful in tapping the entertainment content market in the 21st century.

The only way to stem piracy is to make more content more widely available at a competitive price point, and include added-value that pirates can’t match. It seems so obvious, at least to those of us not invested in failing 20th century business models. Piracy exists because consumers want content and can’t get it legitimately. Legislation can’t fix this. Remember Prohibition? Technology will find a way around enforcement every time. Remember DRM?