Hulu Buys Out Non-Studio Owner 15 Oct, 2012
By: Erik Gruenwedel Home Media Magazine Media reports suggest CEO Jason Kilar could be exiting the streaming service http://www.homemediamagazine.com/hulu/hulu-buys-out-non-studio-owner-28577 Hulu reportedly has bought out Providence Equity Partners the private equity firm that helped launch the online video service in 2007 with a $100 million investment. Los Angeles-based Hulu paid $200 million for the Providence, R.I.-based investment group’s 10% stake in the ad-supported and subscription video-on-demand service now co-owned by The Walt Disney Co., News Corp. and NBC Universal, according to Oct. 12 reports by Bloomberg and TechCrunch. As part of the transaction, some Hulu employees could be allowed to sell their stakes in the service, including CEO Jason Kilar, who reportedly would receive $40 million. Providence’s 100% return on its investment in Hulu was reportedly stipulated should Hulu not go public or be sold within five years. Sale of the streaming service to third parties such as Dish Network was halted after Disney and News Corp. realized Hulu could become a viable SVOD competitor to Netflix. An IPO in 2010 was cancelled as well. News Corp. president and COO Chase Carey last December told an investor group the media company eyed its stake in Hulu as an opportunity to do more than just chase digital dollars. He said that while being in a partnership with the online repurposed website was a bit of a “bear to manage,” having a franchise with the reach, brand and audience that Hulu had was not to be ignored. “The opportunity to take [Hulu], build upon it and expand on it … and have a leadership position really dwarfed the [acquisition] values being put on it,” Carey told attendees at the UBS Global Media and Communications conference in New York. Indeed, Hulu in April said it topped 2 million subscribers paying $7.99 monthly for Hulu Plus – the SVOD unit. Both Hulu Plus and Hulu include advertising in their streams – a reality that has generated hundreds of millions of dollars in incremental revenue to its owners. At the same time, earmarking select repurposed Fox, NBC and ABC content to Hulu impacted incremental revenue opportunities via traditional syndication channels, including transactional VOD and packaged media. Revamped strategies going forward reportedly include upping the number of ads Hulu (and Hulu Plus) viewers would be subjected to. “I think it’s worth us trying to figure out [if] we can navigate this thing and learn from some of the growing pains we’ve had and really continue to build,” Carey said last year. “We look at Hulu as something that can really be a part of our growth story and a really new dimension for our content and brands as we navigate these digital arenas.” Meanwhile, Providence Equity has issued no official statement on the sale and still lists Hulu on its website as part of its $27 billion media, communications, education and information industries portfolio. _______________________________________________ Please be sure to include a URL to the article. Reply to the sender with a "Thank you" if you like this post. _______________________________________________ Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
