Just yesterday, reports circulated that Yahoo
had approached Hulu about a possible acquisition, but that Hulu wasn't showing any
signs of selling. But today is a new day, and all of that has changed as Hulu
placed a "for sale" sign on its window after reaching a licensing
agreement with News Corp. to keep Fox programming on the streaming service.
Obtaining extended licensing agreements is
important for Hulu on the open market because having such pacts retains its
value. For instance, Hulu filed an IPO in the past, but it failed due to its
lack of these agreements.
Now, Fox Broadcasting Co. has renewed its licensing
agreement. The good news is that this new licensing pact will bring Fox
shows like "The Simpsons," "Family Guy" and
"Glee" back to Hulu, which are shows that drew a large viewership in
the first place. The bad news is that the agreement requires a
"significant increase" in ad volume for Fox shows. This means that
Hulu cannot control or limit the number of commercials aired, which could force
Hulu to reduce CPM rates for advertisers. It will also be a major headache for
viewers, since Hulu offers less than half of the average eight minutes of ads
that is present in a half-hour's worth of television.
The advantage of having a heavier ad load would be
of the service, "which forgoes the conventional license fee in
exchange for 70 percent of the revenues."
There are a lot of open questions regarding this
new pact, though. For instance, it is unclear what the length of the deal is
and when Fox will start its increased ad time. In addition, the pact is not yet
in writing, but is currently based on a handshake deal.
But Fox has made it clear in the recent past that
it wants to make cross-platform sales on television and the internet, which
could enable it to join Nielsen's new Extended Screen measurement system.
While all the details are not entirely present,
the Los Angeles Times noted
that Hulu has hired investment banks Guggenheim Partners and Morgan Stanley to
attract possible buyers, which seals the deal on the "To sell or not to
Other reports expect Hulu owners Walt Disney Co.
and NBCUniversal to extend licensing agreements as well in order to help the
selling process along.
In other news, Hulu recently announced that Hulu
Plus, which is $7.99 a month, is now available in the Android Market.
But it is only available for six Android devices, including Nexus One, Nexus S,
HTC Inspire 4G, Motorola Droid X, Motorola Atrix and Motorola Droid ll. Hulu
plans to increase the device compatibility list throughout 2011.
quote: Just yesterday, reports circulated that Yahoo had approached Hulu about a possible acquisition, but that Hulu wasn't showing any signs of selling TO YAHOO.
quote: They also offer much newer shows.