After months of being courted by technology giants and TV signal providers, online video service Hulu is no longer for sale, its media company owners said Thursday.
The Walt Disney Co., News Corp., Comcast Corp. and Providence Equity Partners had been shopping the site since June after receiving an unsolicited takeover offer.
They tested the waters for other interest, and dozens of companies, from Internet giants Google Inc. and Yahoo Inc. to satellite TV providers Dish Network Corp. and DirecTV, began circling.
But the owners said in a joint statement Thursday that Hulu “holds a unique and compelling strategic value to each of its owners” and that they would refocus on “mapping out its path to even greater success.”
Bidding on the service reached as high as around $2 billion, according to a person familiar with the matter.
The owners decided collectively that it would be better to build out Hulu than sell it for a short-term gain, the person said.
The site had been bulking up on content to top up its roster of reruns from Disney’s ABC, News Corp.’s Fox and Comcast’s NBC. It recently said it would add Spanish-language programming from Univision, adding to a whole host of content from rival media companies including Viacom Inc.’s MTV and film studio Miramax.
It had even teamed up with documentary maker Morgan Spurlock on an original show series.
The service has been gaining traction while online streaming rival Netflix Inc. has stumbled badly.
Hulu said last month it had more than a million subscribers who pay $8 a month for a deep catalog of TV shows, less than a year after launching the premium tier last November. CEO Jason Kilar has said Hulu is on track to make around $500 million in revenue this year, up from $263 million in 2010, and that the company is profitable.
In comparison, Netflix had 24.6 million paying subscribers at the end of June, but it warned last month that it expected a net 600,000 to leave by the end of September after a series of unpopular decisions. They included hiking prices as much as 60 percent on millions of customers and splitting its streaming and DVD-by-mail services into two separately-billed operations, a move it has since reversed.
Hulu’s value may have fallen after consumers were seen railing against Netflix’s price increase and Netflix balked at paying an estimated $300 million a year for Disney and Sony movies through pay TV channel Starz, said Needham & Co. analyst Laura Martin.
With the market to pay to stream movies and TV shows cooling, media companies may have decided they could no longer cash out their stakes in Hulu and continue to sell content for top dollar to buyers like Netflix and Amazon.com Inc.
It may have seemed more profitable for Hulu to try to add subscribers and sell more advertising over the long haul.
“Suddenly, when those other entities can offer less cash … then owning Hulu looks more attractive,” she said.
Starz’ shows are still in search of an online home and could migrate to Hulu after its deal with Netflix expires in March, she said.
Hulu’s advertising model also has promise.
Despite lagging far behind online video sites like YouTube in terms of monthly visitors, Hulu viewers watch more ads than patrons of other sites. Hulu accounted for nearly a billion of the 5.7 billion ads viewed in the United States in August, the most of any entity, according to tracking firm comScore Inc.
Apple and Google Face UK Investigation Into Mobile Browser Dominance
Apple and Google aren't giving consumers a genuine choice of mobile web browsers, a British watchdog said Friday in a report that recommends they face an investigation under new U.K. digital rules taking effect next year.
The Competition and Markets Authority took aim at Apple, saying the iPhone maker's tactics hold back innovation by stopping rivals from giving users new features like faster webpage loading. Apple does this by restricting progressive web apps, which don't need to be downloaded from an app store and aren't subject to app store commissions, the report said.
"This technology is not able to fully take off on iOS devices," the watchdog said in a provisional report on its investigation into mobile browsers that it opened after an initial study concluded that Apple and Google effectively have a chokehold on "mobile ecosystems."
The CMA's report also found that Apple and Google manipulate the choices given to mobile phone users to make their own browsers "the clearest or easiest option."
And it said that the a revenue-sharing deal between the two U.S. Big Tech companies "significantly reduces their financial incentives" to compete in mobile browsers on Apple's iOS operating system for iPhones.
Both companies said they will "engage constructively" with the CMA.
Apple said it disagreed with the findings and said it was concerned that the recommendations would undermine user privacy and security.
Google said the openness of its Android mobile operating system "has helped to expand choice, reduce prices and democratize access to smartphones and apps" and that it's "committed to open platforms that empower consumers."
It's the latest move by regulators on both sides of the Atlantic to crack down on the... Read More