By his own words, “the best in entertainment are those that take the biggest risks,” and at age 62, Peter Chernin has been attributed with not only ideating one of the biggest risks (as it was seen at the time) for the television industry but shepherding it to success.
And while Chernin himself is quick to credit Jason Kilar, Hulu’s former CEO, with much of the business’ growth, “anyone associated with Hulu in the first 2.5 years — and probably a year or two before and a year or two after — would have to tell you that that thing does not happen without [Chernin],” according to Jon Cody, who served on the team reporting to Chernin between 2005 and 2008 and as the launch general manager of Hulu.
Hulu would mark just the beginning of Peter Chernin’s impact on the “fourth generation of television,” though. The man has succeeded that bet with a series of strategic investments in digital media companies like Fullscreen, Crunchyroll, Scopely, MiTú, and Base 79.
A Piracy Question Answered and a Race Against VOD
Study the evolution of the entertainment business and it’s not difficult to recognize that, while the “platforms” may change, history certainly repeats itself. It’s those who have the foresight to innovate in anticipation of that change who create the most impact on an industry — and as marked visionaries do, Peter Chernin had a hawkeye’s view of the future of television on the internet.
Following his time at Showtime as EVP of programming and after 15 years serving as the president and chief operating officer of News Corp, Peter Chernin had become intimately acquainted with how aggregation and syndication models had disrupted the early entertainment business. And he’d clearly identified two internet-driven forces that had the potential to seriously shake Hollywood to the core.
Not only did the internet enable piracy and accessibility to content anytime, anywhere, and most importantly, for free, but the inevitability that television was moving online was soon to be a reality. And in search of an answer, Chernin’s vision of the internet and digital distribution began to take shape.
“I didn’t want to see a replication of HBO where a third party had built a dominant business on the back of a studio’s content,” Chernin said in a previous interview. “What we needed was a site that aggregated as much television content as possible. Second thing I felt was all these things would be pirated if we didn’t come up with a legitimate way to get those products.”
The answer, the disrupter, the model of the future: Hulu (though it would not be named until 2007 when it launched into private beta).
And so began Chernin’s personal mission of turning television’s fear of change into an opportunistic battle to beat piracy, monetize higher than personal video recorders, and to ensure that the IPTV generation had more than one distributor next to YouTube, which had just been acquired by Google.
On one side were the networks, clawing to keep old systems alive; on the other, a power executive navigating the thick political waters of Hollywood to innovate around business models that were starting to tremor. “Your job is to maximize your business but your real job is to grow new businesses faster than the old ones decay.”
“Probably most of the people who worked for me at Fox hated Hulu and didn’t like the idea,” said Chernin.
And that was just the first of Chernin’s hurdles. After getting his own team on board, Chernin was tasked with getting Hollywood on board, one network at a time.
With Fox, NBC and Disney-ABC locked in as partners, Hulu opened in private beta in the US in early fall 2007 with flagship television titles like “The Office,” “The Simpsons,” “Heroes,” “Arrested Development,” “Miami Vice,” and “Buffy the Vampire Slayer,” a limited offering of feature films like “Conan the Barbarian,” “Sideways,” and “The Blues Brothers.” Additional distribution support came from AOL, MSN, Facebook, Comcast, Myspace, and Yahoo, where they also made premium TV and film titles available for a time being.
Hulu rapidly found footing on the internet, scaling its library and reach — proving the model, proving the appetite. “I don’t think Hulu happened today without Peter Chernin. He’s a very savvy executive. He has a very good way of turning no’s into yes’s,” adds Cody.
By 2009, the value of a Hulu viewer was roughly 20–30% that of a television viewer with a potential to monetize higher than video on demand, as stated by Chernin in a previous interview. Today, numerous industry executives indicate that potential has been realized, given that viewers can’t fast-forward through Hulu ads like they can with most VOD and recorded content. What’s more, Hulu boasts of having the highest engagement among all ad-supported online video providers. In fact, in Q4 2013, visitors averaged 50 minutes per session, which included watching ads.
Aside from this flagship innovation that has helped move television into the digital age in a big way, Chernin has also been a marquee investor in companies bucking the original digital video wave.
In addition to investing in content companies, The Chernin Group has also produced innovative original content, most notably the transmedia reality series “@SummerBreak,” which was recently renewed for a second season.
Expanding the Vision, Funding the Fourth Gen — The Chernin Group
“I once asked Peter which side of entertainment he prefers more: the business or creative? He immediately replied by saying that it’s all creative,” says George Strompolos, founder and CEO of Fullscreen, one of The Chernin Group’s 2013 investments.
Peter is the kind of unique leader who celebrates creativity (shaped in part by his time at Berkeley where he earned a BA in English) and excels in inspiring creativity from within corporate systems.
Just consider his investments in the emerging media space.
Aside from being an early player in the startup tech scene, sitting on the board for both Twitter and Pandora, Chernin, through TCG, has invested in companies like Flipboard and Tumblr, which have been revolutionizing the way content is distributed and consumed across an increasing number of devices and platforms.
And over the last couple years, The Chernin Group has deepened its footing in the online video game, funding MCNs like MiTú, Base79, and Fullscreen, which raised a TCG-led Series A reportedly in the $30M range.
These companies aren’t your normal content companies — nor are they an upgrade to a stagnant industry, as Hulu was and is with television.
The MCNs are the emblems of a content shift that is happening. You’ve heard this before: People, especially kids, no longer watch video the way everyone used to. There are new ways to find content, new types of content to find, and new creators who don’t need a leading role on a broadcast or cable network to garner a massive fanbase.
The MCNs sit at the center of this, and as evidenced by Chernin’s multiple investments in the space, it’s clear the man foresees a valuable commodity coming out of this ecosystem. Considering his towering impact on the entertainment industry to date, it’s a pretty safe bet that Peter Chernin’s impact on the Fourth Generation of Television is imminent.
It’s a big week here at VideoInk, as we unveiled our inaugural Power-Sixer on Monday. If you enjoyed reading about Mr. Peter Chernin, check out the other executives we’ve already profiled. And come back the rest of this week as we continue highlighting the biggest game-changers in the online video business.