Everyone Wants a Piece of Hulu
Hulu is currently owned by Walt Disney Co. (NYSE:DIS), Comcast Corp. (NASDAQ:CMCSA), and 21st Century Fox. The company has been subject to an intense bidding war as Web streaming becomes a more popular way for consumers to get their TV fix. Disney and Fox can’t agree on the company’s direction, which is the reason they are selling.
Chernin Group is a media company founded by former News Corp. (NASDAQ:NWS) executive Peter Chernin; Chernin was also a founder of Hulu while working for News Corp. and remains on the company’s board. Last month Chernin approached AT&T, which runs the pay-TV service AT&T U-verse, about making a joint bid for Hulu.
Hulu, like rival Netflix (NASDAQ:NFLX), has become a popular way for people to ditch expensive cable services and still get to watch plenty of TV. There is a free version of the service and a paid version called Hulu Plus that offers more access to shows for $7.99 per month, or about the same as a monthly Netflix subscription.
Despite the boom in Internet streaming TV, Hulu isn’t without issues right now. The pay version of Hulu is not yet profitable: The small monthly fee from consumers doesn’t yet cover high licensing costs for the added programming. The ad-based free version is profitable.
Back in April, Chernin offered $830 million for the website, along with assuming $330 million in debt. The amount of the current offer Chernin Group is making with AT&T is unknown. Whoever purchases Hulu will face the added obstacle of working out programming deals with Disney and 21st Century Fox if Hulu is to keep the same programming it currently offers.
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