Hulu Owners Contemplate Sale

Jun 28, 2011

Hulu may be up for sale, if the owners can make up their minds. The free TV-streaming site is co-owned by Disney, NBCUniversal, News Corporation, and Providence Equity Partners, the parent corporations of major TV networks ABC, NBC, and Fox. Hulu has grown so successful that tensions are rising between it and the rest of the businesses owned by the same companies, because Hulu offers the same programming as cable channels and satellite providers. Viewers can watch the current season's programming on Hulu as quickly as 24 hours after it initially airs, and the networks are worried about cannibalization.

Hulu began to look into options for its sale last week after an unsolicited overture from Yahoo!, and the company is expected to meet with potential buyers in the coming weeks. But Hulu's licensing and distribution model-as well as the tensions it has with major networks and providers-may deter investors and buyers.

Still, Hulu's owners may want to sell because they see a sale as an opportunity to let Hulu continue to develop without the inter-company conflicts that are currently brewing, not to mention the fact that it presents a chance to sell content and make money from multiple distributers. But the owners are hesitant, because if the site falls into a competitor's hands, the competition would be able to exploit Hulu's offering to undermine the networks' content, pushing the industry further toward a TV model based on online streaming. If Hulu's owners put it up for sale, they could be giving away their head start toward the next big thing.