Bloomberg News

Hulu Said to Be Talking With as Many as Five First-Round Bidders

September 03, 2011

Sept. 3 (Bloomberg) -- Hulu LLC, the video website put up for sale by its media company owners, has received as many as five first-round bids, including one from Dish Network Corp., a person with knowledge of the situation said.

Each offer included terms for programming rights, the person, who sought anonymity because the talks are private, said yesterday. The person declined to discuss bid prices.

Hulu’s owners, Walt Disney Co., News Corp., Comcast Corp. and Providence Equity Partners Inc., will grant a successful buyer five years of rights to TV shows, including two years of exclusivity, people said on July 19. Google Inc., Yahoo Inc. and Amazon.com Inc. were preparing offers for Los Angeles-based Hulu ahead of last weekend’s deadline, a person said earlier.

Jen Chiu, a Hulu spokeswoman, declined to comment, as did Marc Lumpkin, a spokesman for Englewood, Colorado-based Dish.

Dish, the second largest U.S. satellite-TV provider, is bidding on Hulu as the company separately plans to introduce a Blockbuster streaming-movie service to compete with Netflix Inc. next month, a person said today.

Dish has been negotiating for rights with studios since it acquired Blockbuster, which already had certain contracts in place. The offering is expected to include movies from Starz LLC, said the person. Starz said on Sept. 1 it had halted talks with Netflix to renew an online-viewing deal for next year.

Hulu’s sale process is moving along on schedule, Chase Carey, chief operating officer of News Corp., said on a Aug. 10 conference call. It’s uncertain a deal will be reached, he said.

Path to Sale

“We’ll see where it ultimately ends up,” Carey said. “For us it’s still a decision to see what it looks like at the end, and does it make sense to pursue that path, or does it make sense for us to stay in an ownership position and continue to have it driven by content owners.”

Bids were expected to range from $500 million to $2 billion, the Wall Street Journal reported Aug. 22. Hulu’s owners hired Morgan Stanley and Guggenheim Partners in July to field interest for the site after the company received interest from a potential suitor.

Hulu, which began offering its online TV service in Japan on Sept. 1, carries ABC, NBC and Fox TV shows after the programs air on the networks. The site, which inserts ads into programs, offers limited free episodes and more expansive access with a $7.99 a month HuluPlus subscription.

The website, which didn’t go forward with an initial public offering that may have given it $2 billion in market value, said it will exceed 1 million subscribers by the end of August. Hulu may approach $500 million in revenue in 2011, Kilar April 4 on Hulu’s website, citing trends at the time.

Hulu Plus is available on Apple Inc.’s iPhone, iPad and iPod Touch. It’s also accessible through Microsoft Corp.’s XBox video-game console, Sony Corp.’s PlayStation 3 and on phones using Google Inc.’s Android operating system, including the HTC Thunderbolt.

--With assistance from Alex Sherman in New York. Editors: Rob Golum, Anthony Palazzo

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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