Hulu Has Seven Suitors, Here's Why We're Rooting for Yahoo - VideoInk

Hulu Has Seven Suitors, Why We’re Rooting for Yahoo

/ May 28, 2013

VIS_HuluOriginalSeries

While you were all spending Memorial Day Weekend out in the sun (or, more realistically, bingeing on the new season of “Arrested Development”), the Hulu bidding war ratched up a bit as multiple media reports placed the list of companies vying to buy (or at least invest in) the online video service at seven: The Chernin Group, Guggenheim Digital, DirecTV, Time Warner Cable, KKR, Silver Lake in partnership with Ari Emanuel’s William Morris Endeavor, and Yahoo!, fresh off its $1.1 billion decision to buy Tumblr.

Some of these companies have interesting relationships with Hulu (e.g. Peter Chernin helped found the online video site back when he was COO of News Corp.; Guggenheim is essentially trying to buy Hulu as well as overseeing the bidding process).  Some were involved in the last Hulu bidding war in 2011, which after months of fervent reporting and analysis ultimately went nowhere (which is to say, don’t be surprised if that happens again).

But here is what everyone pretty much agrees on: Regardless of what price Hulu will fetch, a lot of it will be tied to how much content from Hulu’s current owners – Disney, News Corp., and Comcast – the new owner(s) will have access to, and for how long. That’s why Peter Chernin’s original bid for Hulu in this year’s merry-go-round was for $500 million, with an understanding that the price would go up depending on the number and type of content rights attached to it.

We can imagine a lot of different scenarios about the future of Hulu depending on who eventually assumes ownership of the company. But who would be the best suitor for Hulu?

If you’re looking at it through the lens of original web video programming, then the answer has to be Yahoo!, right? Unlike the other six companies (but similar to Hulu), Yahoo! is actively investing in original programming for the web.

That’s not to say the other suitors won’t pursue original online video. It’s not hard to imagine a DirecTV or WME pursuing and distributing original projects through Hulu, especially after the fanfare surrounding Netflix’s “House of Cards” and its resurrection of “Arrested Development,” as well as, to a lesser extent, Amazon’s original comedy and kids programming slates.

But right now, Hulu’s value is almost entirely associated with the TV content it has the rights to. Premium in online video is hard to come by, and Hulu, with its TV library, certainly belongs in the conversation of the top online video providers (whether you’re a consumer or a media planner/buyer).

With Yahoo!, it might be the best of both worlds. As mentioned above, Yahoo! is no stranger to original web programming. The company also just recently made splash by acquiring the rights to the “SNL” archives (away from Hulu, no less). So it’s not exactly against offering TV content online on an exclusive basis. If Yahoo! were to buy Hulu, we can imagine a scenario in which it integrates Yahoo! Screen (and all of the original and licensed content that resides within it) with the Hulu experience. That sounds like a pretty worthy competitor to Netflix, Amazon, and YouTube in terms of both TV content and web-originals.

As for Hulu’s current users, no matter how this bidding war shakes out (unless, like in 2011, nothing happens), the expectation should be that the site won’t always offer as many TV shows and episodes as it currently does. But that’s a different story for a different day.

That’s just how see it. We’d love to hear what you think (or are rooting for) in the comments below.

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