The gavel has fallen in the auction for popular online video streamer Hulu. And the lucky winner is ... no one!
The Wall Street Journal has reported that Hulu's equity owners have backed out after failing to come to an agreement with bidders on the value of future streaming rights. The site is currently owned by News Corp. (Nasdaq: NWSA), Disney (NYSE: DIS), Comcast (Nasdaq: CMCSA), private equity firm Providence Equity Partners, and Hulu employees.
A joint statement posted on Hulu's blog confirmed the decision, saying:
Since Hulu holds a unique and compelling strategic value to each of its owners, we have terminated the sale process and look forward to working together to continue mapping out its path to even greater success. Our focus now rests solely on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu.
It's an anticlimactic end to a saga that began in June after Hulu received an unsolicited buyout offer from Yahoo! (Nasdaq: YHOO). During the episode, rumored suitors included a slew of heavyweight contenders like Amazon.com (Nasdaq: AMZN), Google (Nasdaq: GOOG), Apple (Nasdaq: AAPL), and Microsoft (Nasdaq: MSFT). Too bad this season finale may leave some viewers hanging indefinitely.
Hulu had become something of a double-edged sword to its media conglomerate owners, who were caught at a crossroads since its existence undermined the time-tested TV business with free ad-supported television shows. The more successful Hulu became, the less its owners knew what to do with it.
The site became profitable early last year, just before launching its paid subscription service, Hulu Plus, in competition with Netflix (Nasdaq: NFLX). Hulu just announced that it has crossed the threshold of more than a million paid subscribers at $8 a pop per month. Hulu CEO Jason Kilar is aiming for at least $500 million in revenue this year.
The decision to call off a sale seems to signal that the owners are starting to recognize the value of what they have on their collective hands. Hulu has become a veritable force to reckon with in the world of online video streaming.
Personally, I feel an odd sense of relief that Hulu isn't being swallowed whole by a Goliath who would likely end up retooling the site to its needs, although the service would have fit in perfectly with many of the would-be suitors. I would have been in favor of an Amazon match, if I had to choose.
But you know what they say about woulda, shoulda, and coulda. As a regular Hulu-er, I'm perfectly happy with the status quo.
