By Dawn C. Chmielewski and Meg James
Jason Kilar, the architect and chief executive of the Hulu video service, said Friday that he is leaving the Santa Monica-based company.
In an email to the staff Friday, Kilar said he planned to leave the business he has led for more than five years and that he expects to depart early this year.
Hulu -- once derided as ClownCo -- has grown to be one of the leading sources for online video, generating more than $700 million a year in revenue. However, it continues to be hamstrung by divisions between its investor owners, primarily News Corp. and the Walt Disney Co.
"Some brave souls that were willing to look past the many naysayers and ClownCo moniker jumped aboard and got about the business of innovating and building," Kilar wrote in his email to employees, which also was posted on Hulu's blog. "Five and a half years later, thanks to the missionary work of this amazing 600+ worldwide team and courageous, prescient partners, we are fortunate to have collectively built a culture that matters, a brand that matters, a business that matters."
Indeed, Hulu's revenues have grown dramatically from a few hundred thousand dollars in 2007, and it has generated more than $1 billion for content partners since the launch of its beta in October 2007.
But the online distributor appears to be losing money as it invests in original online series and additional television content for its Hulu Plus subscription service.
Disney, which owns a one-third stake in the venture, reported that Hulu lost money during the entertainment giant's fiscal year, which ended Sept. 29, 2012. News Corp. and NBCUniversal each own equal stakes.
Kilar's departure comes at a time when Hulu faces intensified competition from online distributors Netflix and Amazon, which have been spending millions or dollars to secure digital rights to movies and television series and to produce original shows.
He leaves Hulu after employees collected a one-time bonus for their work building the service. The venture handed out about $134 million -- mostly in equity-based compensation -- in October, when Hulu redeemed Providence Equity Partner's 10% equity interest in the venture for $200 million, according to Disney's financial report.
Kilar and Hulu did not respond to requests seeking comment.
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