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Eisner: Hulu Sale a Battle for Content Access

11 Jul, 2013 By: Erik Gruenwedel

Michael Eisner

The protracted secret bidding for Hulu.com and its sister subscription video-on-demand service, Hulu Plus, is more than a matter of money. It’s about accepting restrictions on access to TV shows and movies mandated by Hulu’s corporate owners The Walt Disney Co., 21st Century Fox and NBC Universal, said former Disney CEO Michael Eisner.

With increasing numbers of consumers watching TV programs on demand, controlling access to time-shifted content is seen as paramount to monopolizing incremental revenue streams of the future.

Hulu bidders include DirecTV and AT&T, in a joint offer with media executive Peter Chernin. Time Warner Cable is said to be interested in becoming a fourth co-owner of Hulu, while joint bidders Guggenheim Partners and KKR & Co., reportedly pulled out of the process July 9.

In an interview with Bloomberg at the Sun Valley tech and media confab in Sun Valley, Idaho, Eisner said Hulu’s owners may offer immediate access to programming to close the deal. But that window will disappear over a short time, he said.

Next to its brand, user interface and streaming technology, Hulu’s bidders covet the platform’s access to “near-term repeats of network programming,” according to Eisner. Indeed, a major point of contention is the reality Hulu’s new owners likely face expiring license rights to much of its existing content agreements.

It is believed that Fox and ABC would give Hulu’s new owner SVOD rights to TV programming for a two-year period.

Eisner said Disney, Fox and NBC want to minimize next-day access to their content in the short-term to better monetize (via higher margins) their content through third-party streaming agreements and/or proprietary digital channels.

“Anybody that is buying [Hulu] is buying it with the dream of that they can be Netflix,” Eisner said, alluding to the SVOP pioneer's strategy of licensing exclusive access and producing original content.


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