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Google, Yahoo, Amazon and DISH Network are all preparing bids for the acquisition of Hulu  (Source: great-deal.eu)
Among those who have prepared bids for Hulu are Google, Yahoo, Amazon and DISH Network

We learned just a few months ago that Hulu had placed a "for sale" sign on its store window, and now, the video streaming subscription service site is to receive about five first-round bids.

Earlier this year, Hulu, which is owned by Walt Disney Co., News Corp., Comcast Corp. and Providence Equity Partners Inc., was working to renew licensing agreements in order to increase its value on the open market. In June, Fox Broadcasting Co. renewed its licensing agreement, which brought shows like "Family Guy," "Glee," and "The Simpsons" back to Hulu. With such agreements in its back pocket, Hulu had something to offer subscribers and could finally have a shot at attracting a buyer.

Hulu went up for sale in late June, almost immediately after Yahoo approached Hulu about a possible acquisition, yet Hulu wasn't ready to sell at that point.

Now, Hulu is to receive as many as five first-round bids where each offer included terms for programming rights. Bid prices are still unclear, but the Wall Street Journal expects that bids will range between $500 million and $2 billion.

Among those who have prepared bids for Hulu are Google, Yahoo, Amazon and DISH Network.

Hulu's owners will grant the winner five years of rights to TV shows, which includes two years of exclusivity. According to Chase Carey, chief operating officer of News Corp., the sale process is trucking alone right on schedule.

"We'll see where it ultimately ends up," said Carey. "For us, it's still a decision to see what it looks like at the end, and does it make sense to pursue that path, or does it make sense for us to stay in an ownership position and continue to have it driven by content owners."

It's tough for video streaming services to compete in a very Netflix-driven world, but with recent issues like Netflix's subscription price hikes and its loss of the satellite TV channel Starz (which is supposedly going to release its movies through contractual negotiations with DISH's Blockbuster streaming movie service), new competitors could give Netflix a run for its money.


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RE: Eh..
By quiksilvr on 9/5/2011 3:08:21 PM , Rating: 2
Uh...

http://www.youtube.com/movies?feature=mh

Pretty sure it IS their target of business. Could you imagine YouTube being the new Hulu? No more of that "not supported on this device" nonsense. No more of asinine blocking.

Keep in mind they are having trouble convincing basic TV channels from allowing their websites to work on Google TV. This purchase could be the silver bullet needed to break through these restrictions.


RE: Eh..
By nocturne_81 on 9/5/2011 3:22:40 PM , Rating: 2
The last thing I want is for Hulu to turn into YouTube, or vice versa... Hulu's strength is it's ease of use and incredibly well thought out design, and more than anything, it's not chocked full of thousands of pages of useless and obscure content (well, not to the extent that YouTube is..).
I just don't think the purchase would work out too well for either party..

As for Google TV (and Apple TV)... they keep trying, over and over.. but I still doubt it will ever really get off of the ground.


RE: Eh..
By rs2 on 9/6/2011 1:15:26 AM , Rating: 3
You miss the point. UX, design, and available content have nothing to do with what market segment a given service is in. Both Youtube and Hulu are in the exact same market segment (streaming delivery of on-demand video content), and arguing that Google has no business interest there is just ridiculous.

The difference between the user-experience on Youtube and the user-experience on Hulu is immaterial. As is your desire to not see them become the same thing. They both provide the same service, to the same target market. From a business perspective, they are already the same thing, just built slightly differently.

Your position is akin to saying that Ford should not purchase Lamborghini because they have no business in the high-performance vehicle industry and you don't want to see the Aventador to turn into a Fiesta. But from a business standpoint, car is car.


RE: Eh..
By nocturne_81 on 9/6/2011 5:34:02 AM , Rating: 1
Perhaps I worded it inaptly.. it was exactly my point that Youtube and Hulu are in the same market -- why would Google want to double down?

And a better example would be Ford buying Volvo.. Sure, it improved Ford safety a bit -- but look what they did to Volvo in the process.

I just think Google has enough on their plate right now, and with grumbling shareholders getting upset over litigation and expenses for 'free' services (not to mention having just spent $12b cash for Motorola), I really doubt they'd be a serious bidder; whereas Yahoo has nothing to lose (they definitely need to do something).


RE: Eh..
By dcollins on 9/6/2011 3:47:17 PM , Rating: 1
quote:
But from a business standpoint, car is car.

This is stupid. Building a high-margin, low-volume sports car is an ENTIRELY different business than building low-margin, high volume consumer vehicles. Lamborghini's are all hand built from mostly custom parts and are sold based on brand value and performance. Ford vehicles are built in massive factories and rely on a diversified supply chain and optimized manufacturing to keep the all-important cost low.

quote:
Both Youtube and Hulu are in the exact same market segment (streaming delivery of on-demand video content)

Your category is too broad. Hulu provides online streaming of studio created, big budget TV shows (and movies). Youtube hosts user created video content, generally low or no budget. These are significantly different product offerings from a business perspective. Hulu has to pay content producers through expensive contracts; youtube merely has to attract users who post content free of charge.

quote:
[Hulu and Youtube] provide the same service, to the same target market.

The market is similar, but the product is fairly different, for the reasons mentioned above. This difference is exactly what makes Hulu so attractive to Google. So far, Google has failed in its efforts to negotiate contracts with large content producers. Hulu would give Google access to "real" TV shows that it so desparately needs to compete with traditional TV service (see Google TV).


RE: Eh..
By Reclaimer77 on 9/6/11, Rating: 0
RE: Eh..
By nocturne_81 on 9/6/2011 5:37:16 PM , Rating: 2
You're taking an inch.. and then smacking yourself upside the head with a ruler.

My point was that they are in the same market, but have entirely different approaches (obviously, they are in no way equivalent services). Google has nothing at all to gain in the transaction other than the licensing of exclusive content. Why run two sites that in many ways compete with each other? Why buy Hulu just to scrap it for it's content (the same in the case of Apple)?

Youtube thrives because of it's user generated content alone (and admittedly, 'free' commercial content such as web-shows, vlogs, and music videos).. If it degenerated into just another platform to waste money on, who would still use it? Anybody here ever pay to stream a movie online..? If so, I know a Nigerian banker who would really like to get your email address..

Meanwhile, Hulu's strength is that it's poised to become a viable alternative to a television service. At it's release, I preferred using it over my cable DVR just because it was simply more convenient to watch a single commercial per break rather than fast-forwarding through a whole 5 minutes. Though admittedly, if I'm not watching the show 'live' -- the most convenient way for me to watch any show is just to go onto one of many illegal streaming sites, and watch the show entirely commercial free within 15 minutes of it's conclusion (exactly why I haven't used Hulu in at least 2 years). It should also be stated that Hulu is much more profitable as a free ad-revenue based product than a premium service -- unless you like to sit around watching old SNL episodes.. I suppose Hulu+ was merely an afterthought, a diversion from their original concept.

I never said that Google shouldn't show interest in bidding, but I seriously doubt they're ready to bid competitively. Sure, they have plenty to gain, but..

The single company listed with the most to gain, and the most to lose, is obvious -- Yahoo. I imagine they'll try everything they can to walk away with Hulu at the end of the day, increasing bidding far past the point where Apple and Google would lose interest. Hell, they'd be crazy not to..


RE: Eh..
By Reclaimer77 on 9/6/2011 6:34:53 PM , Rating: 2
I don't disagree with your points. I was mostly speaking about the offhand and negative statements you made about Youtube i.e "useless" content and etc etc. Personally I spend more time on Youtube than I ever would on Hulu.

quote:
Meanwhile, Hulu's strength is that it's poised to become a viable alternative to a television service.


Not in it's current form because it failed. I'm not sure how something that couldn't remain viable is "poised" to do much. It's not really an alternative when you're paying basic cable prices and still having to deal with commercials. Hulu is basically like watching on demand TV channels on your PC.

quote:
I never said that Google shouldn't show interest in bidding, but I seriously doubt they're ready to bid competitively. Sure, they have plenty to gain, but..


I think they have lots of gain. If I were Google I would buy Hulu, use whatever technologies from it that I deemed appropriate, and then completely shut down Hulu and wipe it off the face of the Earth. Buying the competition to eliminate competition is a time honored tradition. Killing off Hulu to preserve Youtube market share would be a worthwhile investment in my opinion.


RE: Eh..
By nocturne_81 on 9/7/2011 5:48:16 PM , Rating: 2
Well, I didn't mean to discount the value of Youtube so much.. I personally use it everyday, whereas I haven't been to Hulu in years. I was merely trying to emphasize the incredibly vast difference between the two services.

I think you are also emphasizing the premium aspect of Hulu much more than the 'free' side. Hulu+ gives you access to every season/episode of nearly every show created by the 3 media company owners as well as increased resolution and less ads. Meanwhile, the free side gives you a vast selection of the most recent episode(s) of currently running shows if not the entire current season; as well as a good selection of older, more obscure or foreign shows -- in exchange for stomaching a reasonable amount of ads (still less than on television)...

I thought about it a bit, though, and realized it all comes down to the specifics of the licensing.. Does this include the entire media catalog of all three companies, or only what's currently on Hulu? Does the sale price include all licensing fees for 5 years? Is exclusive really exclusive? To what extent? Online only, of course; but what about show/movie availability in other outlets such as iTunes or marketting content on the provider's own sites?

If the answer to many or all of those questions is 'yes' -- then this can indeed be a game-changer, and I could imagine the bidding reaching several billion dollars..


"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis














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