Bloomberg News

Hulu Names Forssell Acting CEO as Site’s Owners Weigh Shake-Up

March 15, 2013

Hulu LLC, the video website, named Andy Forssell acting chief executive officer to succeed Jason Kilar as the company’s dominant investors, Walt Disney Co. (DIS:US) and News Corp. (NWSA:US), weigh what to do with their stakes.

Forssell, the company’s senior vice president of content, helped Los Angeles-based Hulu grow from a startup in 2007 to about $700 million in revenue in 2012, Kilar said yesterday on the company’s website.

Disney and News Corp. are completing plans for their interests in the company, along with Hulu’s senior management, Kilar wrote. Once those are done, a permanent decision regarding the CEO will be made, he said. Comcast Corp. (CMCSA:US), another investor, is barred from an active role at the company.

“Andy has built strong relationships with many of our board members,” Kilar said. “Andy has the board’s strong support in leading the team during this important time.”

Hulu is poised to post record first-quarter revenue and subscriber additions, Kilar said.

Disney, based in Burbank, California, gained 0.7 percent to $57.75 yesterday at the close in New York, while News Corp. climbed 0.6 percent to $30.65. Philadelphia-based Comcast added 1.4 percent to $41.16.

Disney and New York-based News Corp. are in talks that may lead to one buying out the other’s interest, two people with knowledge of the matter said this month.

In that scenario, an agreement would hand control of Hulu to either News Corp. or Disney, said the people. The companies, which each own about one-third, are also discussing selling Hulu or changing the business model, they said.

Disney Goals

Disney, the world’s largest entertainment company, prefers an advertising-focused business model, the people said. News Corp., owner of the Fox network, along with film and TV studios, would like Hulu to rely on subscriptions, the people said. Hulu offers a limited free service and an expanded $8-a-month offering called Hulu Plus. Both include commercials.

The companies may also choose to take no action, the people said. Under all of the scenarios, Comcast, the largest U.S. cable company, would remain a minority investor, they said.

Comcast is prohibited from an operational or board role under an agreement with federal regulators related to its NBC Universal acquisition in January 2011.

The Disney-News Corp. discussions follow a decision by Kilar to step down by the end of this month. He received about $40 million from the sale of Hulu stock back to the company in October, people told Bloomberg at the time. Hulu repurchased a 10 percent stake held by Providence Equity Partners Inc. for $200 million.

Hulu Plus

Formed by NBC and Fox, Hulu allowed viewers to watch shows online with fewer commercials. Disney became an investor in April 2009. Hulu Plus, started in 2010, provides access to a bigger library of shows and the ability to watch programs on mobile devices, Web-connected TV sets and video-game consoles.

Hulu said in December that 2012 revenue climbed 65 percent to about $695 million as subscribers more than doubled to 3 million. The company lags behind Netflix Inc. (NFLX:US)’s more than 33 million worldwide subscribers, and faces emerging competition from Amazon.com Inc. and the new Redbox Instant service offered by Verizon Communications Inc. (VZ:US) and Coinstar Inc.

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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Companies Mentioned

  • DIS
    (Walt Disney Co/The)
    • $89.88 USD
    • -0.35
    • -0.39%
  • NWSA
    (News Corp)
    • $17.62 USD
    • -0.04
    • -0.26%
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