In a move that will protect broadcast network content, Hulu appears headed toward an authentication-style service, migrating away from from its present ad-supported model. A second move in the form of a buy out appears intent on tightening control over content.
On April 26, Hulu.com owners Walt Disney Co., News Corp. and Comcast announced that they are near a deal with Providence Equity Partners to buy out the investment company, according to articles in the New York Post and several online blogs. The industry views this as a precursor to a fundamental change in Hulu’s current open business plan.
Providence invested $100 million for its 10% share of Hulu in 2007. According to an April 26 Bloomberg article, the buyout will earn Providence $200 million. The article indicates that Comcast has not been party to the buyout discussions under terms applied to the Comcast-NBC Universal merger in 2010. Read more
Intent on drawing the video cord-cutting crowd to the Boxee solution, Boxee today introduced a new add-on that helps keep viewers in the Boxee box.
The new “wrinkle” is a dongle that attaches to the Boxee via USB and provides a coaxial connection to an antenna or pay-TV device. The live dongle will allow a user to integrate local broadcast signals or content from cable, satellite or telco into the Boxee experience.
According to Boxee, the majority of highly rated television programs originate on “free,” over-the-air broadcast channels. For many viewers, the all-in-one approach of Boxee integrating OTT content like Hulu and Netflix along with the over-the-air signals creates a compelling alternative to pay-TV.
The Walt Disney Co., News Corp. and Providence Equity Partners said in a prepared statement, “Since Hulu holds a unique and compelling strategic value to each of its owners, we have terminated the sale process and look forward to working together to continue mapping out its path to even greater success. Our focus now rests on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu.”
Recent stories and analysis of the “auction” for Hulu pointed out that given the low bids received, combined with the likelihood of Hulu growing into a more robust subscription service, it could suggest that keeping Hulu and Hulu Plus may be the better solution. Certainly once the million subscriber benchmark was crossed, it seemed that the better strategy would be for the current owners to maintain control of Hulu.
Dish Network, Google and Amazon provided bids for the service, with Google submitting the greatest dollar amount but tying its offer to several conditions. Dish Network appeared to have the inside track to gaining Hulu with the next highest bid. The owners and experts both seemed surprised at the low dollar amounts bid. Indications were that the winner might be getting the Hulu service and content for approximately $2 billion.
The owners are going to keep it and maintain control of the “next day” distribution of ABC, NBC and Fox programming. Had the sale gone forward, relinquishing control of the content might have been a crippling error.
If the list of bidders in the proposed sale of Hulu are Google, Yahoo, Dish Network and Amazon, which company would you likely pick to have made the highest bid? If you selected Google you’d be correct, although there is a “but” after the price pledged. Google has placed conditions on the bid that may make it less attractive than the next largest bid. Read more
Although the company declined to publicly comment, Apple is said to be in discussions concerning a possible bid for online video site Hulu. Last week, the owners of Hulu — Walt Disney Co., News Corp., Comcast and NBC Universal — confirmed that the ownership of Hulu was definitely in play.
A possible Hulu acquisition would provide Apple with a new subscription service featuring more video. Currently Apple provides video for it’s popular iTunes customers on an on-demand rental basis rather than a subscription. Comcast, Disney and News Corp. have built a program rights extension of five years into the sale, creating a strong potential alternative to Netflix.
Estimates are that Hulu will command more than $2 billion.
For more, see this Bloomberg News article.
For several weeks now, the trade press has been buzzing with rumors that Hulu is up for sale. Last week Disney CEO Bob Iger confirmed that the three media companies that own the online video portal — News Corp., Disney and Comcast’s NBCUniversal — are “committed to selling” the site. Iger did not reveal when a sale would occur, but predicted it was inevitable.
Nearly a dozen companies are rumored to be actively involved in discussions with Hulu, including Amazon, AT&T, Google, Microsoft, Netflix, Verizon and Yahoo. Read more