Second Time’s Not a Charm: Hulu Sale Called Off Again, With Plans to Pump $750M Into Video Service
According to a press release just issued by the three companies that own the Hulu premium online video service, there will be no sale of the unit.
It is the second time that Hulu has been on the block in recent years, and the second time it has been taken off. Talk about seller’s remorse.
The companies — 21st Century Fox (formerly News Corp), Comcast’s NBCUniversal and the Walt Disney Company — said Hulu would be recapitalized with $750 million in new funding to propel growth.
The other bidders left in the recent round was a joint effort by AT&T and former News Corp COO Peter Chernin. Earlier this week, as AllThingsD had reported, another bid by Guggenheim Partners was rejected by the owners.
Sources close to the situation said that there is a possibility that some current bidders for the service — such as DirecTV or Time Warner Cable — could be part of that effort via new strategic distribution deals to make the service larger.
It’s another abrupt end to what has been a very noisy and leak-filled auction process — the last time its owners tried this, Hulu was pulled off the market in 2011, after not attracting adequate bids.
And while the press release from the companies was practically jaunty about the prospects of keeping the property, about which they have long had mixed feelings and even outright hostility at times. It’s the great conundrum of the digital age for old-media giants — get on the train, even grudgingly, or you end up getting left behind by massive consumer trends.
The growth of other premium video sites like Netflix — as well as Apple TV and similar video efforts by Amazon and Google, all of which are now gaining steam and more meaningful revenues — has resulted in more than a bit of worry from the media giants. While it has resulted in many more buyers of its content, of course, not controlling the distribution has been a concern, too.
That’s especially true as some of the video distributors of television and movie content have also become creators, such as some laudable efforts by Netflix.
One big concern will be the ability of the trio of Hamlet-like owners to retain talent at Hulu. According to numerous sources, the team has been dissipating as the debate over the service’s fate has dragged on. While the current team has been larded over with retention packages, the company needs to convince its team that this time, the idea of growing Hulu is real.
More to come, obvi, but here’s the release:
21st Century Fox, NBCUniversal and The Walt Disney Company to Maintain Ownership Positions in Hulu
Companies Make Commitment to Recapitalize Hulu with $750 Million in New Funding to Propel Future Growth
NEW YORK & BURBANK, Calif. – -(BUSINESS WIRE) — 21st Century Fox, NBCUniversal and The Walt Disney Company today jointly announced that they will maintain their respective ownership positions in Hulu and together provide a cash infusion of $750 million in order to propel future growth.
Launched in 2008, Hulu is now a leading aggregator of premium online television content from over 400 content partners, and has achieved more than 30 million monthly unique visitors.
“Hulu has emerged as one of the most consumer friendly, technologically innovative viewing platforms in the digital era. As its evolution continues, Disney and its partners are committing resources to enable Hulu to achieve its maximum potential,” said Robert A. Iger, Chairman and CEO, The Walt Disney Company.
“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.”
Hulu launched its premium subscription service, Hulu Plus, in 2010, which has now surpassed four million subscribers after more than doubling in 2012. Hulu achieved record revenues of $690 million that same year.