In a move that might show waning interest by potential buyers because of the backstabbing nature of the current partners in Hulu, someone ‘close to discussions’ has stated that whomever buys the company would have five years of access to the shows including two years of exclusivity according to a Bloomberg report. Let’s face it, given the problems that we have seen at the company in regards to content and the vocal jabs by CEO Jason Kilar, is it any wonder that buyers might be leery about entering into any negotiations with the parent companies? After all, if they’re willing to turn their backs on their ‘first born,’ what would they do to its potential foster parents.
Reporting from ‘people who weren’t authorized to speak publicly,’ and ‘people familiar with discussions,’ Bloomberg states that several buyers, like Amazon and Microsoft wouldn’t bid without some reassurances.
Duh! Hulu is nothing except a video delivery system if there is no content and both companies already have that so they wouldn’t need Hulu. It’s the rights to the content that they’re after surely.
During the two-year exclusivity the networks could still post to their own websites, but could not sell to other streaming services, a la Netflix, but there’s a loophole for on-demand pay TV.
I suppose that, from a common sense, logic perspective, those anonymous information leaks really didn’t say anything that the world didn’t know except for maybe the length of the content access and exclusivity contracts. Seriously, who would want Hulu if all the content was going to lapse and be pulled from the service anyway. It certainly wouldn’t make it more valuable.
What does make it more valuable is the partners’ enmity toward Netflix, who will be re-negotiating some contracts later this year or next. While citing they would not sell to Netflix because it would lower competition on one hand, they then turn and offer exclusivity rights to whomever owns Hulu in the future. No, that doesn’t limit competition in any way, does it?
What about selling to Amazon who has Prime, Microsoft who has Zune, and Google who has YouTube? Wouldn’t that also cut down on the competition? It seems there’s more to it than they would have us believe. Of course, we all knew that right?
Hulu is set to hit one million subscribers this month and at $7.99 a month that’s about $8M in revenue there. Plus with their heavy ad load (for online services) which shows over one billion ads per month, which at $1 CPM would be another $1M a month, but is probably closer to $10-15 CPM, they could be pulling down some $23M a month by the end of August. That’s roughly $276M in revenue, which is only half of what Kilar stated they might do this year citing growth trends.
While business is generally all about the Benjamins, the Hulu sale is proving content is king and thusly, it’s all about the Patrick Janes, Wilfreds and Gordon Ramsays…who are walking hand-in-hand with the Benjamins.