Netflix, Google, Amazon and Yahoo! have all been named as Hulu's secret suitor. Continuing its success, however, isn't as simple as covering its likely $2 billion price tag.
Hulu has a secret suitor that has the media-giant owners of the streaming video site seriously considering a sale, according to reports.
More on this Topic Industry News Blogs Briefing Room
Google, Yahoo, Amazon and even Netflix are among the companies that have been suspected of being the interested party, willing to pony up what Bloomberg and analysis firm SNL Kagan have estimated could be a $2 billion-plus price tag. Apparently feeling good about the attention, the company retained investment banks Guggenheim Partners and Morgan Stanley to facilitate a potential sale, theLos Angeles Timesreported June 22, a day after news of the suitor.
Hulu finds revenue through the advertisements it airs, as well as through its now 1-million-strong Hulu Plus subscribers (a figure dwarfed by Netflix's 23 million subscribers).Bloombergsuggests that its purchase could improve Yahoo!'s ad revenue and help Amazon online video service to better compete against Netflix. Nonetheless, under different ownership, Hulu may be a far less lucrative enterprise.
"By signing up the investment banks ... Hulu is making clear that it is not just on the receiving end of interest," report the L.A. Times. "Rather, its owners — News Corp., Walt Disney Co., NBCUniversal parent Comcast Corp. and Providence Equity — are seeking to exit the company three years after it launched."
As much of Hulu's content currently belongs to its owners, a new owner, needing to acquire such content, would need to have some serious capital.
"Cable satellite and television companies that pay fees to carry network programs have been upset that many of the same shows are available for free on Hulu.
"It all comes down to how much can you spend on the acquisition of content for your subscription library, and today we estimate Netflix is going to spend around a billion and a half dollars on streaming content in 2012," Piper Jaffray analyst Michael Olson said on Bloomberg Television's "Bloomberg West" program. "For any competitor to come into the space, they would need really deep pockets to build up the kind of content library for subscription that Netflix has."
Further complicating matters is the innate tension between Hulu and its owners. Despite Hulu earning said owners a nice chunk of change, their ultimate interests are in their TV businesses, where they now face cable and TV companies, which pay them to carry their network programs, peeved that Hulu offers some of the same programs for free.
Not to be ruled out as a possibility for Hulu, Olson added, is an IPO, in which case Hulu ownership will want to hold off doing anything for a few more quarters, in order to prove to Wall Street that it can sustain, and continue, its Hulu Plus subscriber growth.
"My guess is if it's an IPO that's in the works, it's probably more like mid- to late-2012," Olson said.
Want to use this article? Click here for options!
Source:
No comments:
Post a Comment