Hulu puts itself up for sale | Hacker News Reader

Hulu puts itself up for sale

latimesblogs.latimes.com

71 pointsmef49 comments

Same theme over and over and it's frustrating: technology is fully ready to support streaming and on demand programming, but the content providers don't like licensing the content because it cannibalizes their TV product. And who can blame them really? They're the only show in town and they should cash in via whatever method best suits them.

The only real chance for things like Hulu and Netflix to succeed no-holds-barred, carrying everybody's content, is for them to carry their own content. Netflix is starting to do this and finally some competition in the form of fresh content is beginning to occur. Now if this behavior goes mainstream, people may stop watching traditional television in lieu of Netflix not only because they like the convenience but also prefer the programming. Then we have real incentive for the networks to get their stuff back on streaming platforms because it will no longer be a question of cannibalism, but one of losing viewersip altogether.

This makes sense in my head - hopefully it does too here ;-)

One thought I had was that Hulu/Netflix should buy the rights to cancelled shows that have popular followings and pay to have new seasons made. Obviously this is fraught with potential problems (people are committed to other projects) but it could be cool.

They would have to buy those rights from TV studios, who would for obviously reasons be loathe to part with them. Even producing their own shows is problematic, as the studios can blackball any actors/writers/directors/production people who work with them.

The television and film industry is a tight-knit group, and I can easily see them circling the wagons in order to protect their distribution monopoly.

Isn't that what Canada is for?

It's the same industry and same people. Also, our homebrew shows are mostly crap. Except Trailer Park Boys.

The other obvious issue is that if the show was cancelled by the studio, what makes you think it would be profitable to pay for and produce new shows for distribution across a smaller network (Netflix vs. sum of cable/satellite distribution, which is the case for most major studios)? I suspect FNL/DirecTV may be a counter-argument here, although I don't know the specific economics of that agreement.

TV networks often cancel profitable shows because they aren't profitable enough. There are enormous opportunity costs involved in allocating a network time slot to a show: you only get 24 hours in a day, and only a few of those are prime-time. If a prime-time show isn't making big bucks, you cancel it and try another one, and you keep doing that until you find a show that makes you say, "Hmm...if I cancel this, there's a good chance I won't be able to do better." Television networks, like big movie studios, are in the business of producing lots of shows, hoping for the occasional big hit.

If you're running a streaming service, the opportunity costs of a small-viewership show are much less. As long as you're making some money, there's no reason to stop. Because streaming services do not have to allocate broadcast time slots as a scare commodity, they can go with an entirely different model: many more shows, each targeted at a smaller but more passionate audience.

Profound. Upvote.

You'd have to pick up shows where the fan base was extremely passionate but the show just couldn't find a mass audience. Those types of shows don't come around that often.

With all the cable companies now interested in scripted television, the ability for good shows to make it to a home that will support it through growth is much higher.

Besides the inventory issue, I see huge issues with Hulu and Netflix getting into the production business. Their core business is distribution, not programming and production.

Stargate.

And shows like Arrested Development, Firefly, and Jericho. Maybe not those shows in particular given the amount of time that's passed, but, the next time it happens.

I think Kings would be an excellent candidate for this approach, apart from the $x million per episode production costs... I watched all the episodes on Hulu, why not finish the show on Hulu?

Apart from the entire reason why Hulu wouldn't get into this business, why not? If you approach it that way, it's more of a fantasy than a reality.

I'm not seeing a compelling reason why Hulu/Netflix would be able to produce million dollar+ episodes and make money off of them.

I'm not arguing for Kings mind you, but I will say that it seems all publishers want to become content owners. And if the current content owners don't want to run the site, I find it difficult to imagine they're going to stay with it forever.

The roles of creators and broadcasters are blurring. Not because of a squeezing from CEOs either to turn more a profit, but the necessity of the Internet.

If I owned Crackle, Rev3, YT, Netflix, or Hulu? You can bet I'd be looking to pick up properties with a built-in following.

Arrested Development and Jericho agreed!

Never got into Firefly.

Another consideration is that Netflix uses an HBO model, not a broadcast TV model. So a show is only worth however many new subscriptions it drives. Existing subscribers who watch the show are worthless, unless it prevents them from cancelling.

pretty sure Netflix is already planning to do just that

Really throws the future of Hulu in doubt. If the big three media companies are no longer part owners, and they already see Hulu as undermining and upsetting their traditional partners, what incentive do they have to continue providing free content?

If anything at this point Hulu will be a talent acquisition.

i love Hulu and really dont like Netflix... if Hulu dies I'm going to be firing up Utorrent for the first time in a long time.

Why exactly do you like Hulu? It seems they offer the same content that exists if you go directly to TV channel websites (abc.com, nbc.com, cbs.com, etc). I never found anything on their site that didn't exist on the network's own sites.

Yes, Hulu Plus has older seasons for certain shows but so does Netflix.

If, and only if, they start streaming Mad Men or Breaking Bad then I'm in!

Do you use Kayak or go direct to the airline?

There's a lot to be said for aggregation + really nice UI. Plus they have streaming 720p (drool) and some pretty decent movies.

Netflix has HD streaming also.

I like them because I can decide I like a show like The Office or Lie To Me, and I can watch all episodes, even new ones the day they come out.

This is not true of Netflix or many TV websites.

I like it because I can stream current season shows on the television.

I prefer Hulu over Netflix because it works on the Linux machine I have hooked up to my TV.

I like Hulu Plus for the newer shows and I can watch it on my TV with a Roku.

For starters, the Criterion Collection is on Hulu. They moved from Netflix because Netflix doesn't support "extra features" from DVDs. (The Criterion Collection basically invented DVD extras, so it's a big deal to them.)

I have both Hulu Plus and Netflix. Love them both but they're different offerings.

Hulu is primarily for television especially current ones; Netflix is for movies.

Hulu is probably the most surprising success on the internet today.

Remember when Google referred to it as ClownCo because of the chance they thought it had of succeeding[1][2]? Most people agreed with that assessment, given the lack of success News, Disney & NBC had with digital projects prior to that. What chance did a company have when it had to try & get them all to work together?

The Hulu CEO (Jason Kilar) has done an excellent job.

[1] http://techcrunch.com/2007/03/22/confirmed-tv-networks-launc...

[2] http://techcrunch.com/2007/03/23/what-we-know-so-far-about-n...

For context, last years IPO was expected to raise $300MM on a $2 billion valuation[1]. However, it was also reported that even with $240MM in revenue, a lack of long-term content licenses sidelined the whole affair[2].

What really boggles the mind is the stated reason for a sale: "concerns that the site's success is undermining the traditional television business". If Netflix can hold-on and capture enough quality content, these old-school players will eventually go the way of the big record labels. Hulu's existence actually indicated that they might have learned from the music industry's mistakes.

[1] http://venturebeat.com/2010/10/08/hulu-ipo-report/

[2] http://www.businessinsider.com/hulu-ipo-knocked-off-track-by...

The popular online television site, which has been the cause of much consternation in Hollywood

I don't get it -- why would it cause consternation? It was a joint venture between NBC, Fox and Disney as a means to make available their own content.

Hulu with no content licenses is still valuable. The brand is established, they have significant traffic, the technology seems to be pretty well put together.

Maybe even valuable enough to recoup their $100 million investment.

> The brand is established, they have significant traffic, the technology seems to be pretty well put together.

Disagree.

If google reader couldn't use the NYTimes, ChiTribune, LA Times, etc. would it be valuable?

Yes. I don't subscribe to NYTimes, ChiTribune, LA Times or any other traditional media outlet in Google Reader and I use it every day.

Although the analogy is flawed, your point still stands that Hulu is nothing without content. The difference is that the television industry is so much more bound up in distribution rights than the web in general.

Why doesn't Netflix buy Hulu? They seem complementary to each other--Netflix has movies, Hulu has tv. Unless this wouldn't be allowed for legal reasons.

Because the only thing HULU has over Netflix, is sweetheart content deals. Deals that are poised to evaporate for the publicly stated reason for the sale in the first place.

(the networks don't like how HULU is encroaching on their TV money)

Hulu feels technically sufficient to me. It's about content now. A sale seems like it could go two ways:

1) They've been getting by on sweetheart deals from their owners, and once departed their licensing dries up and they are useless. (Their licensing already look pretty pathetic IMHO - for god's sake there's shows you can view for free online that you can't view as a paying custom on a TV)

2) Separated from TV they can hire negotiators that are cutthroat and leave every negotiation making the content provider feel like they've been taken advantage of. Like negotiators who say "if you don't give your show A, I'm going to go to show B and give them everything they want and promote the hell out of them and bury you." And they mostly lie but sometimes do in fact destroy their opponent to make a point.

But if Yahoo buys them they are fucked, because Yahoo fucks everything up.

I assume Netflix's approach is to negotiate hard, but be willing to walk away from anything because the back catalog has become so large that no one thing is essential. Hulu isn't so different, but is strategically tied to current releases as a starting point.

But if Yahoo buys them they are fucked, because Yahoo fucks everything up.

Viaweb?

Hulu should hire me as their CEO. Here's what I'd do:

1) Secure medium term content deals with all current partners. I'd like five years, but I'll make do with three years.

2) Start building my own high quality content. Try to grab someone like Sue Naegle or Carolyn Strauss (both HBO blood) to run this.

3) Pay crazy money to get DirectTvs NFL deal to Hulu+.

With all that said, I think they've done a pretty good job w/o me. :-)

DirecTV pays $700M/year for Sunday Ticket exclusivity. Good luck getting past that.

Hulu is simply too small to do #1 or #3. They would have to spend phenomenal amounts of money, which they don't have - without an IPO, or perhaps even with one. #2 is doable but not a slam-dunk, it still can be hit or miss.

I hope netflix buys them. It would be a big step towards "cutting the cord".

hope Yahoo! buys out Hulu!, and maybe even PopCap too

Who'd want it, unless someone is looking to launch an inferior Netflix competitor.

Why wouldnt netflix want it? Other than Adrian is pretty damn smart in saying that netflix will only be a cloud consumer - so if Hulu is heavily reliant on their own HW infrastructure for their current delivery - then I can see netflix stating its not a good fit for their model.

'Why wouldnt netflix want it?"

I'm pretty sure the correct question is "Why would Netflix want it?" (companies don't generally acquire other companies "because why not?", at least not ones that hang around long), and I can't say I see a good answer to that. The only thing that Netflix could win with would be licensing deals, except Hulu doesn't actually have them, as they are all short term deals. If Netflix and NBC want to get together, or not get together, Netflix's possession of Hulu isn't going to affect anything either way in that case.

It isn't even worth buying them to squash them; they're doing a very good job of that on their own, and the list of buyers who stands a realistic chance of reversing that is very short.

Just to play devil's advocate here, if you step back and see, Hulu is not a bad acquisition for Netflix and why? Its because Hulu will bring Netflix the 'scale' and additional premium customers. I know a lot of people who purchase Hulu or Netflix, but cannot justify buying both.

Netflix already has the scale.

Why would Netflix want a bunch of 'users' that want free streaming?

Netflix needs to license more current tv episodes and they could crush Hulu.

Wouldn't you rather the company spend money to license content instead of acquiring physical infrastructure considered obsolete after 6 months?

I do not recall recently reading stories about how Hulu traffic is now 30% of the internet traffic during peak times. I do recall reading this: http://www.telecompetitor.com/report-netflix-represents-30-o...

I don't think Hulu has much scale to offer Netflix.

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