Hulu Owners Clash, Rumors Of Possible Sale
Amid reports that Hulu has been approached by one or more suitors, analysts seem torn over the merits of any such deal.
Some believe that the video venture's owners -- including News Corp, Walt Disney, Comcast Corp's NBC Universal and private-equity firm Providence Equity Partners -- are too conflicted to carry on a healthy relationship.
"The disparate corporate interests again have made a joint-venture difficult to sustain," Miller Tabak analyst David Joyce wrote in a research note on Wednesday.
Among other issues, some of Hulu's co-owners have started making their content available on other services, including rival Netflix. In addition, the owners have grown increasingly uneasy about Hulu's business structure, and the lingering fear that free online video cannibalizes TV and paying audiences.
Still, among other would-be buyers, "Yahoo . . . would consider acquiring a stake in Hulu to solidify itself as an entertainment destination and a 'must-buy' for advertisers," notes Jordan Rohan, an analyst with Stifel Nicolaus.
Hulu's estimated $200 million in revenue this year 'implies superior monetization' compared with Google's YouTube, according to Rohan, who estimated that Hulu makes about $14 for every thousand domestic video streams -- six times more than YouTube.
Therefore, "such an acquisition could be a very smart strategic move as the Yahoo sales force would be able to cross-sell Hulu inventory with parts of Yahoo's own content initiative," Rohan added.
Neither Hulu or Yahoo would comment on the rumored acquisition talks.
Earlier this year, Hulu management was reportedly thinking about recasting the site as an online cable operator, which would use the Web to send live TV channels and video-on-demand content to subscribers.
Controversy aside, Hulu attracted 28.5 million unique visitors in July, ranking 10th among domestic online video sites, according to comScore. Plus, Hulu viewers watched 783 million video ads that month -- more than any U.S. Web property.