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'Modern Family' creator: Why I took on Hulu

levitan steve 200 1Exclu: Ever since "Modern Family" creator Steve Levitan told THR about his efforts to remove his Emmy-nominated comedy hit from ABC.com last month, the showrunner has been stirring up cyberspace with his take on Modern Viewing. In an interview Thursday, Levitan spoke about Hulu, piracy and how his ABC bosses feel about his stance.

THR: So we're hearing Steve Levitan hates the Internet.

Steve Levitan: (Laughs) My wife would think that's hilarious since I'm on it so much.

THR: Let's start with Hulu; what's your take there?

Levitan: Look, I'm not naive; I understand why big media backed Hulu -- to stave off piracy and to gain some control in the online space -- but I don't believe Hulu's upside outweighs the potentially disastrous long-term effects. Network TV has some distinct advantages over the music and newspaper industries. Sharing a few songs from an album requires very little bandwidth. News is available from a wide variety of sources. But at the risk of sounding like a pompous ass, nobody but a show's creator and producers is capable of delivering that particular show.

I acknowledge that Hulu's easy accessibility probably keeps some people from pirating. But a respected industry analyst says less than 5% of TV content is being stolen today. Even if that number quadruples as broadband speeds improve, that means 75% of the audience will still be perfectly happy with the present model. And, to quote that analyst, "The logic of 'I'm having trouble getting paid for my content, so let me give it away for free' probably drives Wall Street to allocate capital to other industries."

My other concern is that Hulu is an asset being built with our product. If I were responsible for News Corp.'s stock prices, I might do the same thing. But I feel compelled to speak out if I feel that "growth" comes at the expense of our show.

Listen to this quote by Hulu CEO Jason Kilar from an interview with Charlie Rose:

Kilar: "Everybody at Hulu is an owner in Hulu. That is so different from the cultures in traditional media."

Rose: "How is everybody at Hulu an owner? You mean all your partners are owners, all the people who provide the content are owners."

Kilar: "No. Team members. My assistant is an owner in Hulu. And that's the way it should be because, if we're fortunate to create upside, to create value in Hulu, then I think everyone should participate in that upside."

I'm very happy that Mr. Kilar's assistant gets to share in Hulu's profits. Assistants are underpaid, and I don't begrudge them anything. It would just be nice if he felt as strongly about those providing his content.

THR: And ABC.com streaming? Same essential argument?

Levitan: Look, I value every single one of our viewers, which is why I just want them to be clearly counted, no matter on what platform they're watching. Right now the producers of "Modern Family" have no idea how many people watch our show each week on all platforms, and nobody seems to want to tell us. If a disproportionate number of any show's viewers watch in alternative ways, then, under the current system, that show may not appear to be as strong as it actually is. If a show brings someone to a screen, any screen, then shouldn't they get credit for that? If not, then some really interesting new shows with a disproportionate number of young online viewers will get canceled because their audience isn't being counted. That said, I've been told that Nielsen will step up its measurement of online numbers this season and that other companies like Rentrak are making inroads. Hopefully, these are steps in the right direction.

THR: What about the argument that online viewing provides a valuable marketing platform?

Levitan: It's true. It's also a great way for people to catch up. But once a show is launched, once it's successful, it stops being a marketing platform. "Family Guy" does not need Hulu's promotion.

THR: What kind of business model would you like to see online for "Modern Family"?

Levitan: 1) Show "Modern Family" online, but include all the same commercials. The CW sold its 2010-11 upfront ad inventory this way and was able to charge higher rates than if the spots were on network alone. 2) Make those online viewership numbers readily available to everyone. 3) If some people want to view the show without commercials, then, by all means, allow them to do that for a fee.

THR: Some are doubtless reading this going: "But your show is so successful! So what if some watch online too"?

Levitan: The iPhone and iPad are very successful, but, with all due respect to the prophetic Steve Jobs, I don't see Apple giving them away. It's very simple. Shows like "30 Rock" and "Lost" and "The Office" are expensive to produce. Plus these "hits" cover the costs of all the misses. If viewers want to continue to see quality content like that, then we have to find a way to keep it profitable. Otherwise, we'll all be watching clips of a sneezing panda -- which, by the way, were adorable.

THR: Others probably wonder: Shouldn't this be addressed during WGA contract negotiations?

Levitan: This does not feel to me like an issue that gets settled by our union. This will be decided at the highest levels by those who have the power to do so.

THR: Rupert Murdoch also has been an advocate of content creators getting paid for use of copyrighted content online. Has he reached out?

Levitan: In June, I voiced some of my concerns when I spoke at the D8 conference, and Mr. Murdoch was sitting in the front row. Afterward, we had a very friendly chat. I was heartened to hear that he shares many of my same concerns.

THR: What's been the reaction from ABC bosses to your comments?

Levitan: I have a very friendly relationship with Bob Iger and Anne Sweeney, and I respect them both. They've been incredibly supportive of "Modern Family." They know my opinions, and while we may disagree on some issues, I understand they're wrestling with extremely complex issues in a fast-changing environment. Their job is to steer a multinational corporation, while my job is just to watch out for "Modern Family." I certainly believe that there exists a sweet spot where our interests align.

THR: Do you think that bringing this issue out in the open has advanced this cause?

Levitan: Many people at all levels are having this conversation privately. I'm the only one dumb enough to have it out in the open.

THR: Do you think other TV producers need to be speak up?

Levitan: I would never presume to tell anyone else what they need to do. However, if others share my concerns, I'd sure appreciate the company. A dramatic "I'm Spartacus" moment would be nice.