Wednesday, June 22, 2011

Is Yahoo Gaga Over Hulu?

It seems there is some interest in purchasing Hulu, and the unofficial reports say that it is Yahoo. As a competitor to Google and You Tube, this acquisition might make sense, but is there enough reward to justify the cost? "The unsolicited offer has prompted Hulu’s board to consider its options, and the company is speaking to potential advisers, these people said. It may contact potential buyers, including other media companies and private equity firms that have wanted the chance to buy the service." For Hulu's owners, NBC, Fox, Disney and others, separating themselves from a platform company may enable them to better determine how best to distribute their content. It may also help their negotiations with cable partners and to assure themselves that they are getting the best license deals.

A sale seems to make sense as well as these content partners don't easily get along. As they compete for ratings and ad dollars, it is tougher to then turn around and cooperate for Hulu business. It also restricts opportunities for each content company to design their own unique leverage opportunities to marry online content with linear. And for NBC, who is also owned by Comcast, a sale would get NBC out of this very complicated relationship.

And perhaps Hulu needs a different owner, one that is more committed to it's success. "Hulu has lost two of its most vocal backers: Peter Chernin, formerly the News Corp.’s president, and Jeff Zucker, who left NBC Universal last fall. James Murdoch, who became News Corp.’s deputy chief operating officer in March, is among those who is much more skeptical about Hulu’s business prospects." A Hulu-Yahoo combination might yield more favorable results although the cost for content will undoubtedly rise. It's one thing to sell content to your own company, another when you have no restrictions.

So let's see how real this rumor of a sale really is. I for one would like to see it happen.