The 1 Billion Dollar Dance For Video Platform Hulu

DirecTV the US broadcaster and 5 other media companies are doing their $1 billion dance for video platform Hulu.

Satellite TV giant DirecTV and 5 other bidders have each offered $1 billion (or more) for the video platform, Bloomberg News reported last Saturday.

So what’s the deal? And why is Hulu being sold?

Who’s dancing for video platform Hulu?

In addition to DirecTV, Hulu has received offers from the private equity firms KKR and Silver Lake, but also bids from Time Warner Cable and Guggenheim Digital were on the table.

In May 2013 ViralBlog already reported that Yahoo’s CEO Marissa Mayer was ready to dance for the video platform.

About Hulu and its growing revenues

Hulu is owned by entertainment mogul Walt Disney and media companies News Corp and Comcast.

Hulu is offering audiences from the US the possibility to watch TV-series online.

Their revenues from advertising and subscriptions increased with 65% in 2012, to a staggering amount of $695 million already.

So their business model is not only depending on advertising, it is also powered by Hulu Plus: Spotify-alike monthly subscriptions.

If Hulu can push its CAGR towards 50% in 2013, they will be hitting $1 billion revenues by the end of 2013. This could be a simple metric, not myth.

Why would such a company be sold for $1 billion? Does not make sense.

My Opinion?
In 2011 I also wrote here about the dance for Hulu, when the owners were willing to sell Hulu.

When looking at the infamous quote of Walt Disney below, why would the company be willing to sell Hulu? Should we trust a company that is selling its own dreams? Not very authentic.

Back then (2011) the Hulu owners were worried about the rights (IPR) on the series, but decided not to sell because the biddings were too low.

I have the following remarks and questions for Hulu’s owners Walt Disney, News Corp and Comcast:

Hulu successfully transformed its business model from pipe to platform.

Hulu is surfing on the biggest internet trend called online video.

Hulu is a non-linear platform, with great technology inside.

Hulu has solved the IPR “issues” very well.

Hulu is growing fast in revenues.

Why would they consider selling it?

Can’t the owners put their legacy aside, embracing non-linear and platform thinking?

Dear people at Walt Disney, what about the dream you are selling: the pursuit of dreams?

What About You?
If you were one of the mentioned Hulu owners, would you consider selling Hulu for $1 billion? And why or why not? Share your opinion in the comments below.

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About the Author
Igor Beuker was CMO at 3 listed companies, chairmain at the IAB, jury member at Webby, AMMA and Esprix awards, founder of 2 agencies (sold to WPP) and Global Chief Social Officer at Mindshare. Now he is ‘freejack’ consultant and still a sought after keynote speaker.