Hulu staying put with current owners, getting $750M shot in the arm

Hulu staying put with current owners, getting $750M shot in the arm

Summary: The near future for the online streaming service looks steady once again.


There have been rumors and reports for months about potential ownership changes at Hulu. They're being put to rest today.

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The coalition of 21st Century Fox, NBC Universal and The Walt Disney Company issued a statement on Friday reasserting their current ownership positions.

Here's an excerpt:

“We believe the best path forward for Hulu is a meaningful recapitalization that will further accelerate its growth under the current ownership structure,” said Chase Carey, President and Chief Operating Officer of 21st Century Fox. “We had meaningful conversations with a number of potential partners and buyers, each with impressive plans and offers to match, but with 21st Century Fox and Disney fully aligned in our collective vision and goals for the business, we decided to continue to empower the Hulu team, in this fashion, to continue the incredible momentum they've built over the last few years.”

The ownership team is also giving the online video service a $750 million shot in the arm to propel more growth.

Launched back in 2008, Hulu has already grown to an ecosystem comprised of more than 30 million monthly unique visitors and roughly 400 content providers on tap.

With Netflix achieving similar (and paid) subscriber figures and experiencing a renaissance in popularity thanks to the success of its original content (see: House of Cards), the pressure is on for Hulu to innovate and compete.

Perhaps that is why there has been a firestorm over the last few months about another entity taking over Hulu to give it a new direction.

Along with big entertainment names such as DirecTV and Time Warner Cable, even Yahoo was in the mix following its $1.1 billion acquisition of Tumblr.

Given CEO Marissa Mayer's obvious penchant for buying up tech services with significant social and mobile elements, the Hulu-Yahoo idea wasn't terribly outlandish, to say the least.

Nevertheless, the future of Hulu as far as leadership is concerned is solid for the time being.

Topics: Tech Industry, Apps, Cloud, Social Enterprise

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  • Nobody Was Going To Buy This Lemon

    The history of independent streaming/download services has been pretty dismal; as soon as a product shows any signs of making money, the content providers either ratchet up their already-exorbitant royalty requirements, or demand new restrictions (like regional or time-period availability) be put in place to reduce the value of the service.

    Of course, since Hulu belongs to content providers anyway, they weren't able to pull these kinds of tricks without hurting themselves in the pocket. That's the real reason they wanted to sell it off, so they could make somebody else suffer instead. But nobody was stupid enough to take the bait.
  • Dilemmas

    Under the current structure, licensing revenues are effectively capped, as what Disney gains for charging more for a show comes out of its, and its partners, share of Hulu revenues.

    Plus all the networks have cable affiliates, and many popular television programs have same week rebroadcast via cable.

    Thus, the sell. Let's say a Yahoo! does buy it, eventually current licensing agreements conclude and then it's get as get can for the studios with a hit network show.

    Meanwhile, advertising revenues, which, if not sufficient in themselves, can be enhanced by block purchase deals (1.25 x prime time rate buys 1 prime time + 4 Hulu spots), would be in the hands of a sales team that can only offer Hulu availabilities.

    Without a long-term guarantee for current content at stable rates, it's a bad buy.

    We shall see if 750 million gets it enough of a boost so advertising revenues grow to the point that Hulu's owner can do well even with the inevitable increase in licensing costs for attractive programs.
    • Follow-Up

      I wasn't clear. I'm saying the 750M is to enhance Hulu for another future attempt at selling. The networks that own Hulu would prefer having a new buyer in the market, rather than trying to make Hulu lucrative.