"History has shown that incumbents tend to fight trends that challenge established ways and, in the process, lose focus on what matters most: customers," Kilar wrote. "Hulu is not burdened by that legacy."
The memo blindsided Hulu's directors, including Disney CEO Robert Iger and News Corp. President Chase Carey. People close to the executives said they were displeased about being taken to task so publicly.
Kilar, Iger and Carey declined to comment.
Much has changed since Hulu launched in 2008. The two executives who hired Kilar — former News Corp. President Peter Chernin and former NBCUniversal CEO Jeff Zucker — have exited their companies, leaving Kilar without his influential advocates. NBCUniversal has also been sidelined, forced to give up its voting rights in Hulu as a condition imposed by the government when it approved cable giant Comcast's takeover of NBC.
The recession also intervened by forcing advertisers to pull back, sending the networks scurrying to find new sources of revenue. The networks didn't have to go far: They began demanding that cable and satellite TV operators pay fees to carry the broadcast programming they previously were getting for free. Giving away those same shows for free on Hulu created a double standard.