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Hulu is still investing in content

Hulu CEO Jason Kilar has announced this week that Hulu now has a million paying subscribers on the streaming service. The million-subscriber mark was previously expected by the end of the year.

Hulu has been trying to 
sell itself to the highest bidder. Reports suggest that Google, Yahoo, Amazon, and Dish Network are in the early running to acquire the streaming service. The bids were expected to reach into the $2 billion range, but the bidding has now stalled. Hulu is said to now be considering whether the sale is the best option for the site.

News Corp Chief Operating Officer Chase Carey told Reuters at a conference, "We're still evaluating the situation."

Reuters reports that people that have been critical of the planned sale, and have been urging Hulu owners to keep the major distribution channel rather than sell to another firm. Hulu is a joint venture of News Corp, Walt Disney Co and NBC Universal. The fourth owner is Providence Equity Partners, a private equity firm.

Despite the owners considering the sale of Hulu, the company is still investing in content. Kilar said that Hulu would invest over $375 million in content this year.



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By Solandri on 9/22/2011 1:33:50 PM , Rating: 2
quote:
Hulu has been trying to sell itself to the highest bidder. Reports suggest that Google, Yahoo, Amazon, and Dish Network are in the early running to acquire the streaming service. The bids were expected to reach into the $2 billion range, but the bidding has now stalled. Hulu is said to now be considering whether the sale is the best option for the site.

Currently, Hulu is owned by NBC/Universal, Fox, and ABC/Disney. It pretty much doesn't have to worry about licensing content. A couple weeks ago Starz (which has streaming rights for Disney) walked away from Netflix after Netflix offered $300 million, 10x what it had previously paid to license streaming content.

I suspect the message that sent to any prospective buyers of Hulu was that NBC/Universal, Fox, and ABC/Disney were planning to sell Hulu for billions, then were going to try to stick the buyer for billions more in licensing fees in the future. Basically, long-term all they'd be buying is hulu.com and the name recognition. Any content to be streamed from the site would have to be paid for separately.

Suddenly it looks like Hulu is only worth a few hundred or tens of millions, since it's going to be like buying a storefront, minus the inventory and supplier contracts. For major Internet companies like Google, Amazon, and Yahoo, they probably feel they could build their own streaming site from scratch and negotiate streaming licenses. Dish Network might still be interested since they already have a system in place for negotiating broadcast licenses, and are just missing a streaming storefront.




"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer

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