Amazon has hired former Sony TV and Hulu executive Mike Hopkins to oversee Amazon Studios and Amazon Prime Video, reporting directly to company CEO Jeff Bezos.

Hopkins, who is departing a leading role at Sony Pictures TV that he occupied since late 2017, will replace Jeffrey Blackburn, Amazon’s senior VP of business development and digital entertainment, who is going on sabbatical.

Jen Salke, who currently heads Amazon Studios, will report to Hopkins, as she did Blackburn.

“Mike comes to us with over 20 years of industry experience at Fox, Hulu, and Sony,” Blackburn said in an email to his Amazon staff, obtained the Los Angeles Times. “He has an extensive track record as a global business leader in media, film and TV — negotiating landmark content and distribution agreements, running marketing operations, leading product/tech teams, and overseeing production of breakthrough television content.”

Tony Vinciquerra, chairman of Sony Pictures Entertainment, sent a note to staff Monday morning, thanking Hopkins for his work at the studio. “From day one he was charged with rethinking the way we run our television businesses,” the memo said “Under his watch, SPT has been transformed into a stronger and more nimble organization, able to pivot and change course quickly in today’s rapidly evolving entertainment landscape.”

It’s expected that Salke will continue to make inroads into the Hollywood production business through Amazon Studios’s Culver City, Calif. headquarters. It’s also expected that Blackburn will return to work at the company, but in a different capacity. 

Amazon has hired former Sony TV and Hulu executive Mike Hopkins to oversee Amazon Studios and Amazon Prime Video, reporting directly to company CEO Jeff Bezos. 

Hopkins, who is departing a leading role at Sony Pictures TV that he occupied since late 2017, will replace Jeffrey Blackburn, Amazon’s senior VP of business development and digital entertainment, who is going on sabbatical. 

Jen Salke, who currently heads Amazon Studios, will report to Hopkins, as she did Blackburn. 

“Mike comes to us with over 20 years of industry experience at Fox, Hulu, and Sony,” Blackburn said in an email to his Amazon staff, obtained the Los Angeles Times. “He has an extensive track record as a global business leader in media, film and TV — negotiating landmark content and distribution agreements, running marketing operations, leading product/tech teams, and overseeing production of breakthrough television content.”

Tony Vinciquerra, chairman of Sony Pictures Entertainment, sent a note to staff Monday morning, thanking Hopkins for his work at the studio. “From day one he was charged with rethinking the way we run our television businesses,” the memo said “Under his watch, SPT has been transformed into a stronger and more nimble organization, able to pivot and change course quickly in today’s rapidly evolving entertainment landscape.”

It’s expected that Salke will continue to make inroads into the Hollywood production business through Amazon Studios’s Culver City, Calif. headquarters. It’s also expected that Blackburn will return to work at the company, but in a different capacity. 

Sony Pictures Entertainment said it has tapped Hulu CEO Mike Hopkins as chairman of Sony Pictures Television, while Fox Networks Group chief operating officer Randy Freer will move to the streaming service as CEO.

The moves come as a surprise. Hopkins has been with Hulu since 2013 and has steered the company to acclaim for its original programming – its Handmaid’s Tale won the 2017 Emmy Award for Best Drama – and comes just months after the service embarked on an aggressive campaign to add live TV to its mix. 

The move will reunite Hopkins with his former boss at Fox Networks Group Tony Vinciquerra, who now heads Sony Pictures Entertainment as chairman and CEO.

“I’ve known Mike for years and can think of no better person to lead our television businesses during a time of such extraordinary evolution and opportunity,” Vinciquerra said in a statement. “Mike is a proven and innovative leader who has played a key role in redefining today’s television landscape, both for consumers and for how content producers reach them.  We are thrilled to have him at SPE to work alongside our deep bench of talent and lead our studio to even greater heights.”

Hopkins fills the spot left vacant when SPT chief Steve Mosko stepped down last year. Hopkins will oversee all television production, distribution and marketing operations globally for the studio, as well as SPE’s media networks business.  He will officially start in late November and report to Vinciquerra.

 “Tony has long been a colleague and mentor of mine, and I’m really excited to join him and the rest of the talented team at SPE,” Hopkins said in a statement.  “There is a tremendous opportunity to build on SPT’s momentum globally and I look forward to working with the team to realize that potential.  I want to thank Tony and Kaz for this incredible opportunity.”

Sony Pictures Television has produced top series like Breaking Bad, Better Call Saul, The Blacklist, The Goldbergs, Shark Tank, Preacher, Outlander, as well as shows for digital platforms like as One Day at a Time for Netflix.  SPT also produces first-run syndicated programs such as Wheel of Fortune and Jeopardy!, and network daytime serials The Young and the Restless and Days of Our Lives.

Freer, who has been president and COO at Fox Networks since 2013, will be based in Lons Angeles. His new job is effective Monday.

“We want to thank Mike [Hopkins] for his leadership in steering Hulu to its current era of growth and success,” Hulu’s board of directors said in a statement. “Randy has a unique knowledge of Hulu and expertise building consensus among its owners, and an excellent track record leading a complex organization at the nexus of the television business. There’s no better candidate to lead Hulu as it embarks on its next chapter.”

At Fox Networks Group, Freer oversaw revenue, distribution, operations, business development and strategy for all aspects of the Fox Television Group, FX, FOX Sports and National Geographic Partners, and was responsible for rights acquisitions and team and league relationships on behalf of FOX Sports.

Prior to being named to his current position, Freer served as co-president and COO, Fox Sports Media Group, where he focused on growing and enhancing Fox Sports’ portfolio of league, conference, and team media rights.  In recent years, he oversaw the negotiations that led to long-term agreements with the National Football League, Major League Baseball, NASCAR, and the USGA, as well as with the Pac-12, Big 12, and Big East Conferences. Freer also played a significant role in Fox’s landmark acquisitions of the World Cup and the Ultimate Fighting Championship (UFC).  He also was at the forefront of the acquisition of true[X], an engagement and on-demand marketing company which serves as a key component of FNG’s non-linear advertising products and services.

“Hulu is at the center of transformation in entertainment,” Freer said in a statement. “Hulu’s management team and employees have positioned Hulu to be a leader in defining the future of content creation, distribution and monetization – all while putting the viewer first. I’d like to thank Hulu’s Board for this exciting opportunity.”

The rise of over-the-top television services and a growing cord-cutting trend are applying pressure to cable’s pay TV business as never before.

As the quarterly impact of subscriber losses on legacy cable-TV operators is scrutinized, many investors’ deepest concern is an eventual tipping point at which new, internet-delivered “skinny” TV services will become the dominant viewing option and traditional bundled packages will fade.

While an in-footprint strategy focused on a next-generation video platform helped Comcast buck the trend and actually grow its video subscriber base, most other U.S. cable operators are still consistently losing customers.

Most incumbent MSOs don’t compete directly with other cable operators, a regulatory dynamic that, over many years, has resulted in a mélange of cross-industry policy, tech and marketing organizations such as NCTA–The Internet & Television Association, the Cable & Telecommunications Association for Marketing, the Society of Cable Telecommunications Engineers and CableLabs, as well as joint ventures like Canoe, the cable industry’s advanced-advertising consortium.

Because cable-TV operators are essentially awarded an exclusive franchise to serve an area, they’ve focused their video and broadband assaults on their own footprints and against rivals such as the telcos, satellite-TV providers and overbuilders.

As it becomes more challenging for operators to gain, yet alone retain, video subscribers in their own territories as they fend off old rivals and a fresh phalanx of virtual MVPDs, though, questions are swirling as to when, not if, MSOs will develop their own OTT services to launch beyond their traditional borders.

Such a brash move would create a cascade of consequences for programmers in particular, but it would certainly force other cable distributors to do the same, likely sparking an all-out video Armageddon.

OTT ON THE MARCH
AT&T and Dish Network have no such industry allegiances to worry about, and have already marched ahead with their own OTT TV services — DirecTV Now and Sling TV, respectively. Verizon Communications, meanwhile, has been rumored to be developing a virtual MVPD of its own that could be sold on a nationwide basis.

And though cable operators such as Comcast have stressed that the economics of an OTT TV service simply don’t add up, it’s clear that it and other cable operators are making the necessary preparations to build and deliver an out-of-market service — just in case.

The technology needed to pull this off is the easy part. The more difficult business-facing aspects of building an OTT service are also coming together.

Earlier this year, industry sources confirmed a Bloomberg report that Comcast has already locked in the rights to offer some channels over-the-top on a national basis. However, it was also stressed that a portion of those rights came by way of “most favored nation” clauses in carriage contracts with programmers that ensure that Comcast gets the same terms that are granted to other distributors, including virtual MVPDs. There’s also no clear indication yet that Comcast intends to act on those rights.

And Comcast hasn’t wavered from its position about OTT economics.

“We think we have a lot of opportunity just in our footprint,” Brian Roberts, Comcast’s chairman and CEO, said on the company’s first-quarter earnings call. “It’s a big upside. We continue to believe in what we’re doing. … The second thing, we just haven’t found the business model that works outside. We’ll keep evaluating, keep looking at it, but our success within our footprint is packaging, bundling. So we’ll continue to drive that internally within our footprint.”

But Comcast is a different animal even among its MSO peers, and has some advantages and initiatives underway that others do not.

X1 is a prime example. That multiscreen, cloud-based platform now serves as the core of Comcast’s next-generation video service. However, Comcast is also getting some out-of-footprint benefits, in terms of both economic scale and product influence, via X1 syndication deals it has forged with Cox Communications and two Canadian operators — Shaw Communications and Rogers Communications.

Comcast is also starting to underpin a new in-footprint skinny TV service with X1 technology. Sources confirmed that Comcast is eyeing a third-quarter commercial launch for Xfinity Instant TV, a managed IPTV service that will feature a range of packages, a cloud DVR service, and initially target broadband subscribers who don’t take a pay TV package from Comcast. Reuters said the app-based offering will be priced starting at about $15 per month and include packages that could sell for up to $40 per month, and allow for add-ons such as ESPN.

With the proper digital distribution rights, it would not seem a difficult thing for Comcast to pivot that handiwork into an OTT product.

But would it make any money? Without the benefits of service bundling, including the latching on of superhigh margin broadband services and newer products like Xfinity Home, a standalone OTT TV service would certainly be less profitable.

As another potential advantage that other MSOs don’t have, Comcast will also get a close-to-first-hand look at how profitable (or not) a virtual MVPD can be.

Hulu, which is partly owned by Comcast’s NBCUniversal, last week launched the beta version of a live TV service that starts at $39.99 per month for a lineup of 50-plus channels, including live locals of the Big Four broadcasters in some markets. The new service, which includes Hulu’s premium SVOD offering, also features some add-ons, including unlimited in-home streaming and enhanced cloud DVR service that allows users to fast-forward through ads in recorded shows, that, when bundled, push the price to almost $60 per month.

Hulu’s live service is just getting off the ground, but the company, which has revenues coming in the door from its millions of SVOD customers, is already costing Comcast big money. In a 10-Q report filed late last month, Comcast disclosed its share of losses at Hulu in the first quarter were $54 million due to higher programming and marketing costs.

Speaking on CNBC, Hulu CEO Mike Hopkins expressed confidence the new OTT service will turn a profit via its mix of live TV, SVOD and advanced ad capabilities.

Dan Rayburn, executive vice president of StreamingMedia.com and principal analyst at Frost & Sullivan, is on board with Comcast’s position about the economics of OTT.

“The economics don’t make sense; we really don’t have to debate that,” he said, pointing out that the content- licensing costs alone are a killer. “People say all you need is big scale. Netflix has 100 million subs … and they’re still not profitable.”

And the new class of virtual MVPDs face the challenge of marketing services that are designed to appeal to cost-conscious cord-cutters.

“With a live, linear service, you can never charge customers enough to make up your costs,” Rayburn said, pointing out that it’s this degree of sticker shock that caused Microsoft to throw in the towel years ago when it was mulling its own OTT TV service.

He also doesn’t believe the current pay TV environment and its battle against cord-cutting and luring in cord-nevers will force cable’s hand to go out-of-market.

He said services like Sling TV, PlayStation Vue and DirecTV Now have hardly put a dent in the market, and that there’s a good reason why they don’t (or rarely do) offer subscriber numbers — because they don’t want Wall Street to figure out the costs of running a service that sells for $20 to $40 per month.

But today’s troubling pay TV trend “certainly makes [cable operators] re-look at how things are packaged and offered,” Rayburn said. “But what’s the benefit to your overall business? I don’t see one.”

Telsey Advisory Group media analyst Tom Eagan also isn’t convinced operators are plotting to offer video service outside of their footprints anytime soon. In an interview, he said any attempts to secure out-of-market content rights are more than likely an effort to keep their options open.

“Who knows what will happen in five years?” Eagan said. “You always want to have as many levers as you can. I don’t expect anything in the next couple of years, but they want to have the optionality.”

So why, then, are all of these OTT TV services entering the fray if there’s no money to be made? Rayburn said the answer is simple — they all are owned by larger companies that can hide the bad economics, or take the hit without getting killed. DirecTV Now is owned by AT&T, YouTube TV by Google, Sling TV by Dish, PlayStation Vue by Sony and Hulu by a handful of major programmers. fuboTV, the sports-oriented vMVPD, is an exception.

TOO BIG NOT TO TRY
“No one is standalone” in that OTT TV grouping, he said. “None of these guys can survive or exist if it wasn’t a big conglomerate that was actually operating it or running it, because the economics don’t work as a standalone business.”

Colin Dixon, founder and chief analyst of nScreenMedia, agrees that rising content costs are making all pay TV services less profitable, but also believes that cable operators going OTT is an inevitability.

“I think they’re all going to end up having to do it — the environment is just ripe for it,” he said, adding that pay TV subs are seeking other video options in increasing numbers. “Even if it’s marginally profitable, it’s still incremental revenue that they get to add to the bottom line. I don’t see how they can resist doing it in the long run.”

Mike Farrell contributed to this story.


SIDEBAR: Cord-Cutting Draws More MSO Blood
If cord-cutting is among the key reasons prompting cable operators to look beyond their borders for video growth opportunities, then consider that box checked — in permanent ink.

It’s now undeniable that U.S. pay TV providers are contending with cord-cutting along with a large group of consumers who have never taken a traditional pay TV package.

Even before all public cable providers reported their first-quarter results, MoffettNathanson issued a report that said the U.S. pay TV industry lost about 762,000 video subscribers in the period, making it the worst-ever Q1 when viewed through the video lens.

“For the better part of 15 years, pundits have predicted that cord-cutting was the future. Well, the future has arrived,” MoffetNathanson principal and senior analyst Craig Moffett declared last week in his Q1 2017 Cord-Cutting Monitor, which found that multichannel video programming distributors were taking it on the chin despite positive new household formation.

First-quarter video losses were more than five times as large as last year’s loss of 141,000, and that the incremental number of cord-cutter and cord-never homes has grown to more than 6.5 million since 2013.
— Jeff Baumgartner

Add Hulu to the growing list of OTT service providers that will enable subs to download titles and watch them offline.

“Yes, it's definitely on our road map. It's something that we're going be doing in a few months. We're working hard on the technology around that and getting the rights squared away,” Hulu CEO Mike Hopkins told Adweek.

That keeps pace with the trend. Netflix added that option (for certain titles) last November, adding a feature that is also supported by another rival SVOD service from Amazon.

Hulu, coincidentally, is seeking those rights and capabilities as it gets ready to launch a virtual MVPD service. Comcast and some TV Everywhere apps from programmers like Starz already offer download options. Comcast’s cloud DVR service for X1, for example, lets users “check out” a digital copy of a DVR recording to take with them for offline viewing on tablets and other supported mobile devices. Hulu’s coming pay TV service will also offer a cloud DVR, though it’s not clear yet if Hulu will also allow subs to sideload recorded shows to other devices.

RELATED: Hulu Sneaks a Peek at OTT TV Service

“It's going to be fully functional, just like you could expect from a regular DVR,” Hopkins said in the Adweek interview.

Dish’s $99 portable video device, HopperGO, lets subs take DVR-recorded TV shows and movies on the road for offline viewing.

RELATED: Dish Pitches Free HopperGO to New Subs

Having Hulu join the downloading mix soon represents another step toward irrelevance for PlayOn Cloud, a recently launched service from MediaMall Technologies that enables users to record and download movies and shows from Netflix, Amazon Video, Hulu, HBO Now and other subscription services.

RELATED: PlayOn Cloud Takes OTT Offline (subscription required)

NEW YORK — Hulu is the latest media company to reveal plans to offer a “skinny bundle” of live cable and broadcast network feeds to stream over the Internet. Hulu CEO Mike Hopkins announced the proposed streaming service last week by emphasizing that subscribers to the package will be able to enjoy “live sports, news and events in real time without a traditional cable or satellite subscription.”

Hopkins’s emphasis on live event programming is important. While offering a slimmed down package of entertainment-themed programming will have its appeal for young millennials and cord-cutters who want to slice their cable bill, Hulu seems to believe that in order to gain broad appeal these bundles must offer a good helping of live sports and news content — arguably the last vestige of must-see TV for today’s binge-watching, delayed-viewing consumers.

A quick look at recent ratings trends shows how appealing and valuable live event programming is. During the first quarter, sports and news programming comprised nine of the top 15 most watched shows during the period. (AMC’s The Walking Dead held the remaining spots.)

Also fans are streaming more live events — sports content in particular — via the Web, as such events become more available. CBS Sports’ live stream of Super Bowl 50 consumed more than 402 million total minutes on mobile devices on Feb. 7. The National Basketball Association’s NBA League Pass out-of-market offering scored a record 27 million video views and 1.2 billion total minutes of viewing during the 2015-16 regular season — including, for the first time, single-game sales.

On the live news side, Fox News Channel, CNN and MSNBC have benefited greatly from the contentious and unprecedented presidential campaign. Fox News was the most watched network on cable in primetime during the first quarter of 2016, posting a 37% increase over the same period a year ago, followed closely by ESPN. CNN posted a whopping 162% primetime increase to finish among the top 10 most watched networks, while MSNBC was up 65% year to year, according to Nielsen.

Not all distributors are convinced that live sports and news programming is vital to a basic skinny bundle package, particularly given the high price of sports networks. Verizon recently released its monthly $55 Custom TV package featuring 45 entertainment channels, but not ESPN, FS1, Fox News Channel or MSNBC. Verizon Custom TV subscribers would need to add a “sports channel” package and a “news and info” package to get those networks.

As more distributors explore skinnybundle offerings — and as more cable and broadcast networks wrestle with the idea of a “less is more” bundled world — a workable structure that benefits all parties will eventually emerge. If it looks anything like what Hulu is proposing, it will hit the field running with live sports and news programming.

Hulu CEO Mike Hopkins confirmed to The New York Times that the online video hub is indeed developing an over-the-top pay TV service that will deliver a slimmed-down bundle of broadcast and cable channels.

Details on how Hulu will price and package these services is still in the works, but the paper confirmed earlier reports that it will cost in the area of $40 per month and that it’s part of an initiative by Hulu owners – 21st Century Fox, The Walt Disney Company and Comcast’s NBCUniversal – to “rethink” the future of TV. More details are expected today when Hulu makes its Upfront presentation in New York.

The Wall Street Journal reported Sunday that Hulu was working a planned Q1 2017 launch of the new service and was in on distribution deals with Disney and Fox. NBCU is actively negotiating with Hulu about a proposed multichannel TV service, an industry source familiar with the negotiations told Multichannel News.

Hopkins, the long-time TV industry exec who took the helm of Hulu in the fall of 2013, told the Times that the plan for the new service is coming together as broadband speeds rise and as there are increased instances in which programmers are looking to license programming through OTT distribution channels.

“There’s a paradox of choice that is out there today with the number of channels that are available. It is not intuitive or easy always to find them, particularly on your mobile device. We are going to try to solve that by making it more personalized.”

Hopkins also brushed off the suggestion that an OTT-TV service would be viewed as a “declaration of war” on traditional MVPDs.

“It is not a declaration of war on anyone,” he said. “I don’t think we are designing this for people that are really happy with their pay TV service. This is designed for the people that the marketplace is concerned are falling out of love with pay TV. We want to have a product for them.”

Hopkins agreed that Hulu does compete for content rights, “but I am not sure I would say we are rivals just yet.”

He said Hulu has not yet decided if it will let viewers skip commercials or opt for a commercial-free version of the OTT-TV service. Hulu introduced an ad-free version of its SVOD service last September.

When Hulu does introduce its offering, it will have an installed base to target – its current SVOD service has about 10 million subs.

Update: Hulu announced today that it is nearing 12 million U.S. subs, touting year-on-year growth of more than 30%.