Hulu Looking Around for Prospective Buyers
Monday, June 27, 2021 5:37 PM

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After talk last week of a possible offer from Yahoo to buy Hulu, it looks like the online video provider is doing some scouting of its own for prospective buyers. The company’s owners plan on meeting a range of likely buyers in the weeks ahead, according to company insiders.

However, according to the WSJ, people close to the company’s owners say that a sale may still not go through. The company’s owners have questioned if the sale to another party would do them more harm than good.

Hulu is owned jointly by News Corp., Walt Disney and Comcast, along with private equity firm Providence Equity Partners having a 10 percent stake. Last week, Ad Age reported that Hulu had entered into a ‘tentative agreement’ with one of its owners Walt Disney to renew streaming rights. In addition, Hulu has also negotiated a deal to renew content agreement with another of its owners- Fox.

Could this mean that Hulu is prettying itself up for a potential sale?  Any content deals that are in place while the sale is being negotiated adds value to the company. Hulu could possibly seek out a deal with Comcast as well to increase its attractiveness, and hence asking price to a possible buyer.

Hulu’s owners for now are still trying to figure out how to profit from an emerging group of viewers who demand content on alternate platforms like mobile. Hulu’s primary service is a free service that is supported by ad revenues. However, Hulu’s owner who license the content do not want to give away too much free programming which put more lucrative licensing deals with cable and satellite operators in jeopardy.

This is the very fact that Hulu’s management have had tussles with its owners – forcing it to license more contents to Hulu rather than its competitors. However, with more cable operators and content providers identifying the internet as vast potential market, they are now looking at providing their own online content rather than use Hulu as a platform.

Even if Hulu is eventually sold, its present owners will still maintain a degree of control over the site through the content deals that they have in place. The deals allow content providers like Disney and Fox to delay the free content that is streamed to Hulu, and offer them the chance to launch their programming under their own brand if they choose to.

 

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