Yahoo makes multiple bids between $600-mn and $800-mn for online-video site Hulu
27 May 2013
Yahoo has tabled a bid between $600 million to $800 million for online-video site Hulu, All Things D yesterday reported, citing numerous sources close to the situation.
The reason for the wide range in its offer is because Yahoo has proposed several different prices based on a variety of circumstances, including the length of the licensing rights for content and how much control the programming companies selling Hulu have over their media, said the report.
Apart from Yahoo, the other interested buyers are private equity firms KKR, Guggenheim Digital and Silver Lake Partners, Time Warner Cable, Directv, and the Chernin Group.
Hulu, in which Walt Disney Co, News Corp and Comcast Corp each own one-third stake, was put on the auction block in 2011, with Google, Amazon.com, Yahoo and Dish Network Corp reportedly showing an interest.
But the owning consortium abandoned the sale after concluding that the strategic value of continuing as shareholders far outweighed the benefits of a divestment.
Los Angeles-based Hulu is best known for free online access to popular TV shows from its strategic owners, but, in July 2010, it launched a paid subscription service as a way to expand its offerings to include TV shows from other programming partners like Viacom.
Hulu brings together a large selection of videos from more than 410 content companies, including Fox, NBCUniversal, ABC, The CW, Univision, Criterion, A&E Networks, Lionsgate, Endemol, MGM, MTV Networks, Comedy Central, National Geographic, Digital Rights Group, Paramount, Sony Pictures, Warner Bros., TED and more.
Users can choose from current primetime TV hits such as The Simpsons, Modern Family, Glee, The Office, Jersey Shore, The Daily Show and The Colbert Report; classics like Buffy the Vampire Slayer, The A-Team and Alfred Hitchcock Presents; full episodes and clips from Saturday Night Live.
Hulu's stiffest competitor is Netflix, which counts more than 33 million paying subscribers in the US.
Though Hulu has gained immense popularity, its owners are under increasing pressure from their cable and satellite distribution partners reluctant to pay premium dollars to carry content that is being offered for free on the web.
Further, many programme makers have been reluctant to put their shows up on a free site with an advertising model that has not yet proved itself with premium video.
Hulu posted a 65-per cent rise in revenues last year to about $700 million since paying subscribers more than doubled to 3 million.
The Yahoo move comes just days after it offered to buy logging service Tumblr for $1.1 billion, a deal which would be chief executive Marissa Mayer's largest acquisition since she took charge last year of the once Internet giant.
Although Yahoo's initial bid for Hulu appears to be low, the report said that the owners would reject any bids under $1 billion.