Report: Dish, Google Frontrunners in Hulu Auction

27 Sep, 2011 By: Erik Gruenwedel

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Google’s $4 billion offer tops all but includes myriad restrictions; Dish Network’s $1.9 billion offer could see Hulu backend technology join Blockbuster’s burgeoning distribution platform

Search behemoth Google and Dish Network Corp. appear to be the two lone bidders at the top in the ongoing auction for repurposed content aggregator Hulu.com and SVOD platform Hulu Plus.

Google reportedly has offered $4 billion for Hulu, which is co-owned by The Walt Disney Co., News Corp. and NBC Universal, but has included numerous conditions on the bid, including extending current third-party content license agreements, according to BusinessInsider.com, which cited two sources familiar with the situation.

Satellite TV operator Dish Network’s $1.9 billion offer is considered the frontrunner because it carries no conditions and is targeted more toward Hulu’s backend technology than content rights. A wining bid could see that technology buttress Dish’s recently announced Blockbuster Movie Pass platform, which includes by-mail, transactional VOD and SVOD.

The Hulu auction — first announced last summer — was expected to elicit bids upwards of $2 billion. Then came word that News Corp. was reconsidering selling — a stance COO Chase Carey has not wavered on. In addition, most of the license agreements expire within two years, requiring the wining suitor to renegotiate TV rights going forward — most likely an expensive proposition.

Strangely, Comcast, which owns NBC Universal, but has no say in Hulu due to regulatory mandates, earlier this month bowed an iPad app that gives users free access to NBC programming — directly undercutting Hulu’s clout. This reality apparently has scared off bids from Amazon, Microsoft, DirecTV and Yahoo, among others.

“We continue to believe NBC has an ulterior motive - either to destroy Hulu (threatens Comcast’s Xfinity Brand and Comcast’s control of the customer) and/or Comcast is so desperate to improve the ratings of the NBC Network, it will do anything to raise awareness for its fall TV schedule — including going against its own TV Everywhere strategy,” BTIG Research analyst Richard Greenfield wrote in a Sept. 14 blog post.

 

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