Hulu Still in Talks With Time Warner Cable for Equity Stake15 Jul, 2013 By: Erik Gruenwedel
The online content aggregator is off the market, but corporate owners — Disney, Fox and NBC Universal — reportedly are looking to add a fourth partner
Hulu’s tortured auction and sale maybe shelved for the second time in two years, but its corporate owners reportedly are still in discussions with Time Warner Cable to make the cable operator a partner.
TWC, which had sought to acquire 25% of Hulu, is likely coveted following the July 12 announcement by Disney & Co. to halt the private sale of Hulu and subscription video-on-demand unit Hulu Plus, and instead infuse the platform with $750 million in funding, according to Reuters, which cited sources familiar with the situation.
Such a deal would help Hulu secure additional funds to acquire content and more effectively compete with Netflix and Amazon Prime Instant Video.
The talks underscore the long-term value Hulu’s owners see in online video distribution and SVOD.
Disney CEO Bob Iger, who, along with 21st Century Fox, announced the canceled Hulu sale from the Sun Valley, Idaho, executive summit, said the site had incremental value if properly exploited.
“If the future of Hulu is bright we should hold on to it,” Iger said July 12.
No. 2 cable operator TWC has seen its video subscriber base decline in recent years as increasing numbers of households opt for SVOD and/or foregoing pay-TV altogether.
Analysts contend TWC would use its stake in Hulu to generate incremental revenue in the distribution of content over the Internet.
BTIG Research analyst Rich Greenfield said he believed Hulu should not be acquired by a multichannel video program distributor to avoid increasing the latter’s leverage in content license negotiations. He advocated selling Hulu to a non-MVPD, if at all.
“Hulu has an incredible set of apps and distribution that the networks just can’t duplicate. It never made sense to sell to a distributor,” Greenfield told Reuters. “We are very pleased and advocated the owners hold onto Hulu from the very beginning.”