Joining at least seven other companies in the bidding, Silicon Valley giant Yahoo has reportedly submitted a bid for video site Hulu. Other bidders include DirecTV and Time Warner Cable. Hulu, which is currently jointly owned by News Corp., Disney and Comcast, has both a subscription and an advertising business.
While the deal is an effort to boost Yahoo’s video offerings, the company already has a respectable amount of exclusive video content. For example, comedian Jack Black is producing a Web series that debuted on Yahoo Screen in March. So, while Google has YouTube and Amazon has Amazon Instant Video, Yahoo is not far behind.
Yahoo has reportedly offered multiple amounts for Hulu, from $600 to $800 million. That price range is tied to the length of the licensing rights for content available on Hulu. Assuming that the licensing issue can be resolved, the big question for Yahoo is Hulu’s place in the market, where consumers already have access to TV Everywhere and Netflix. Read more
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.
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.
Spun off last week by Cablevision, the former Rainbow Media Holdings may be the acquisition target for one of several media companies. Rumor has it that Disney, News Corp. and Time-Warner each may have an interest in buying the newly renamed AMC Networks.
AMC Networks owns AMC, IFC, WE TV and the Sundance Channel. AMC also owns IFC Films and international programmer and TV program distribution unit. Speculation is that a deal for AMC Networks could run in the $3 billion range.
None of the organizations has commented publicly on the rumor. Of course if a deal is to go through it will provide the wining content provider with even more market power in retransmission consent negotiations.