Hulu receives three bids of over $1 bn: report
09 Jul 2013
US online video-streaming site Hulu has received bids of over $1 billion from three bidders, the Wall Street Journal yesterday reported, citing people familiar with the matter.
The three bidders include joint bids from AT&T Inc and Chernin Group as well as from DirecTV and Guggenheim Digital Media which has teamed up with private equity firm KKR & Co, the report said.
The owners of Hulu could finalise the deal in a week or two after the deadline for bids ends this week, the report added.
Established in 2007, Walt Disney Co and News Corp each own about one-third stake in Hulu, while Comcast Corp gave up its stake under an agreement with regulators to gain approval for its 2011 acquisition of NBC Universal.
In October 2012, Hulu paid $200 million to acquire private equity firm Providence Equity Partners' 10-per cent stake, around the time Walt Disney Co and News Corp were also considering other options, including buying out each other's stakes.
In 2011 Walt Disney Co and News Corp had put Hulu on auction, for which Google, Amazon.com, Yahoo and Dish Network Corp had reportedly put in bids, but the sellers chnaged their mind about selling out after concluding that the strategic value of continuing as shareholders far outweighed the benefits of a divestment.
Los Angeles-based Hulu is best known for free online access to popular TV shows, but it launched a paid subscription service in July 2010 to expand its offerings to include TV shows from other programming partners like Viacom.
Hulu brings together a large selection of videos from more than 410 content companies, including Fox, NBCUniversal, ABC, The CW, Univision, Criterion, A&E Networks, Lionsgate, Endemol, MGM, MTV Networks, Comedy Central, National Geographic, Digital Rights Group, Paramount, Sony Pictures, Warner Bros, TED and more.
Users can choose from current primetime TV hits such as The Simpsons, Modern Family, Glee, The Office, Jersey Shore, The Daily Show and The Colbert Report; classics like Buffy the Vampire Slayer, The A-Team and Alfred Hitchcock Presents; full episodes and clips from Saturday Night Live.
Hulu's stiffest competitor is Netflix, which counts more than 33 million paying subscribers in the US.
Though Hulu has gained immense popularity, its owners are under increasing pressure from their cable and satellite distribution partners reluctant to pay premium dollars to carry content that is being offered for free on the web.
Further, many content makers have been reluctant to put their shows up on a free site with an advertising model that has not yet proved itself with premium video.
Hulu posted a 65-per cent rise in revenues last year to about $700 million since paying subscribers more than doubled to 3 million.
