While Hulu’s owners officially took the streaming video service off the market last year, would-be buyers are still showing interest.
Sources told AllThingsD’s Peter Kafka that some of the usual suspects are still inquiring about buying Hulu, including Amazon and Yahoo. One newcomer could be Guggenheim Digital Media, the owner of The Hollywood Reporter, Billboard, and Adweek. And as you’ll recall, Guggenheim’s new CEO is former Yahoo exec Ross Levinsohn, who tried to broker a deal for Yahoo to buy Hulu during his short stint running the company’s Media division.
Hulu originally got put up for sale last year after its two controlling owners, Disney and News Corp., had several disagreements over the service’s future business model. However, rumors said that no one was willing to pay for Hulu at the initial $2 billion price for several reasons — chief among them being the availability of new television content. Hulu currently has three-year contracts to play content from Disney-owned ABC, News Corp.-owned Fox, and Comcast-owned NBC, but none of these content partners would withhold TV content from beyond that because it would hurt Hulu’s capability to turn a profit. If someone buys Hulu, what’s to say that these contracts will still be available to renew? And as we’ve pointed out, Hulu without its premium content is pretty useless.
Hulu is also a bit less attractive now, some may argue, than it was when the service was still up for sale. Longtime CEO Jason Kilar has departed Hulu for greener pastures, partial owner Providence Equity cashed out its stake, and all of Hulu’s remaining owners are beefing up their own online video strategy for current TV shows. Rumors even suggest that ABC may launch a new set of mobile applications that will enable cable subscribers to tune in to new shows as they premiere on traditional television.
My guess is that Hulu probably won’t sell for a while at the old billion-dollar asking price, and that might be fine with Disney and News Corp. Hulu will need to prove itself as an online video powerhouse (in terms of advertising revenue, if nothing else) after major broadcast stations like ABC and Fox build out their own digital strategies that will inevitably pluck some attention away from Hulu. There are a few ways to make sure that happens, but time will tell if it actually does.