Hulu was for sale. But studios 21st Century Fox, NBCUniversal and The Walt Disney Company are doubling down on the web streaming service. They will maintain their respective ownership positions and together have committed to lay down a cash infusion of $750 million. They say they’re investing in future growth.
Truth is, they didn’t get the price they were looking for–they wanted more than the $2 billion they were asking for in 2011. Interested buyers included Peter Chernin, an early proponent when he ran the 20th Century version of Fox, who brought in partner AT&T, Time Warner Cable, Yahoo, and DirecTV. But with Netflix and Amazon and Google continuing to encroach on the entertainment arena, the old-guard studios need a plan.
For now they’re continuing with Hulu. Which is successful! This year, reports the NYT, viewers streamed more than one billion videos–mostly TV shows– on the site in a single three-month period. Clearly, online streaming is for many a preferred way to view content. And Hulu has also entered the original content arena, producing some twenty shows to date. Why should the studios give this valuable future-looking company up to their rivals?
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. But the three owners have different views and needs for the future. Disney, Fox and NBCUniversal all own broadcast networks; because NBCUniversal is owned by Comcast, it is a nonvoting partner.
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.
“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.”