The Hulu auction seems to be faltering. Microsoft is said to have stepped away, as did Yahoo! Collusion on their parts? After all, they do collude on many other things already. Nah, it was probably that whole thing about the CEO getting fired which, Occam’s Razer tells us, is most likely the reason. A Reuters article states that things have cooled down in the bidding and the sale could even be ended altogether if the owners don’t get what they want out of the bids.
Hulu May Not Sell?
So it seems their asking price is quite high compared to what they have been offered. Perhaps if they were to move a little on the content rights lengths and such, they might get a bit closer to the numbers that they want. After all, without the content, as I’ve said before, Hulu is just another online video delivery platform.
Reportedly, the asking price for Hulu is $2B, but several companies have already dropped out claiming that it’s just not worth it without an extended exclusivity on the content. After all, content is king, is it not? Therefore, if you can’t get the content what good is the service? It’s not got but a million subscribers, it does have a great video delivery service with a built in billion ad impressions a month. But could you not build a newer, faster one, for less cash?
No, content is indeed the crux of the matter. The Hulu owners have it and want to keep it, yet want to sell Hulu for a massive price tag. If that is indeed the case and yearly contracts, purportedly, have been bumping up against $300M a year over at Netflix, between the four of them at $2B for Hulu they’d get $500M each. Aha! So that’s not the magic number it seems, $2.4B would be since that would give you two years of exclusivity on the content and them $300M each per year for two years.
By that math, then the alleged 5-year exclusive deal that has been asked for would bring the total price for the service to around $6B and I don’t think that even Google would be willing to pay that much.
What is will end up coming down to is, how much are News Corp, Disney, Comcast and NBCU (along with Providence Equity) really willing to take for it all?
Maybe we’ll find out next week when the bidding should move on to another round. Still in the hunt apparently are Google, Amazon, DirecTV and DISH. After seeing what DirecTV is up to I can see why they would want it. DISH already snapped up Blockbuster so it seems that Hulu would be agreat addition of content. Google could instantly bolster the YouTube premium content and Amazon could massively expand Prime, so if those are indeed the companies in the hunt, it could be an interesting sprint to the finish.