Who’s Buying Hulu?

Mari Silbey —  July 10, 2013

Hulu for sale

Someone is buying Hulu, and the list of suitors is down to three. Before the close of bidding last Friday, AT&T jumped in on a joint offer with the Chernin Group. Peter Chernin founded Hulu years ago when he was still president of News Corp., but his company’s bid was likely too low without the additional backing of AT&T. DirecTV and Time Warner Cable are also in the hunt, and rumor has it that the bids are upwards of $1 billion. Variety reports this morning that Guggenheim Digital is out of the race after submitting a bid below what Hulu was willing to take.

Hulu initially put itself on the auction block back in 2011, but backed away from a sale at the eleventh hour. Google and Dish were the leading bidders then, with Google reportedly offering up to $4 billion for the company as long as Hulu was willing to throw in expanded content licensing rights as part of the deal. (It wasn’t.)

Unlike Boxee, Hulu has built a significant consumer fan base, and the company says it earned close to $700 million in revenue in 2012. However, Hulu still isn’t profitable, and the issue of video licensing fees is a thorny one as programmers try to protect as much of their revenue as possible through the existing pay-TV ecosystem. Perhaps given those conditions, it’s not surprising that a pay-TV company – and not an outsider like TiVo or Google – appears set to come out on top when the Hulu sale finally closes.

8 responses to Who’s Buying Hulu?

  1. Seems likely this won’t turn out well. DirecTV or TWC might just take Hulu private, requiring a subscription of some kind to watch. Ditto AT&T I suppose, though since they’re just part of the bid it isn’t obvious that would happen.

    The good news is they’re probably going to have to decide–everything free, or everything subscription? And the issues of content licensing–what Hulu has the rights to and what it doesn’t–will have to be nailed down, even just for the next year.

    All that said, while they’re dithering shows are getting licensed elsewhere. New Girl is now on Netflix, Amazon Prime is coming on all the time.

    I expect that when the dust settles Hulu will be a shadow, and will eventually vanish into history.

  2. Yeah, long term I don’t have much hope for Hulu… And I imagine some of their existing licensing deals would include escape clauses upon any acquisition.

  3. “And I imagine some of their existing licensing deals would include escape clauses upon any acquisition.”

    Ya’ think?

    Given the lack of content, I’m planning on waiting for all the existing bidders to drop out, at which point I’ll win the auction for $2,500, and leverage the Seth MacFarlane and Alec Baldwin ads into a thriving T-shirt and coffee mug enterprise.

  4. Free Hulu hasn’t much content worth anything.

    Paid Hule has some, but still has ads in addition to a subscription.

    Hard to figure that logic out.

    As an Amazon prime member, I’ve yet to find a single show of interest that is not avaialable on Netflix (also a member there).

    Any unique content that I’ve ever found on Amazon has always required more cost, above my prime subscription. This makes my prime subscription essentially worthless for video.

    Netflix is the only service that makes sense to me. A pretty good (but not complete) set of content for one fixed monthly fee.

  5. I’m outraged. eBay informed me this was a binding auction. I don’t see how they can just pull it instead of accepting my $2,500 bid. I’d already started printing up the T-shirts and coffee mugs. I’m now considering legal action…

  6. No one.

    LA Times had great headline “Hulu Pulls Another Lucy”

  7. I think you might have a shot next time Chucky. You could be the only bidder.

  8. “I think you might have a shot next time Chucky. You could be the only bidder.”

    But what if the Hulu sales are just like season-ending series cliffhangers? In that case, the sale won’t actually happen until the series gets cancelled.

    Only then will I’ll be able to launch my highly-profitable T-shirt and coffee mug enterprise…