The owners of online video service Hulu have decided to terminate the sale process, in which DTH provider Dish Network and rival satellite broadcaster DirecTV had expressed their interest.
In a statement, News Corp, Providence Equity Partners, The Walt…
The owners of online video service Hulu have decided to terminate the sale process, in which DTH provider Dish Network and rival satellite broadcaster DirecTV had expressed their interest.
In a statement, News Corp, Providence Equity Partners, The Walt Disney Company and Hulu’s management team said: “Since Hulu holds a unique and compelling strategic value to each of its owners, we have terminated the sale process and look forward to working together to continue mapping out its path to even greater success. Our focus now rests solely on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu.”
Another owner, Comcast, was not named in the statement. According to reports, the main stumbling block was related to digital rights to certain TV programmes, but also valuation differences between sellers and bidders, as the company had hoped to attract offers of approximately US$2bn.
Besides Dish and DirecTV, other suitors had included Yahoo, Google, and Amazon, with Google and Dish rumoured, last month, to be the front runners.
A Hulu acquisition would have been in line with Dish’s strategic push into broadband video-on-demand services in the face of increasing competition from the likes of Google, Apple and Netflix. Dish Network’s founder Charlie Ergen previously said that broadband was fast becoming key to video distribution, while earlier this year Dish snapped up the assets of bankrupt US movie rental chain Blockbuster, including it online film streaming and downloading service, for US$230m in April.
Dish’s other significant investment this year has been the acquisitions of ATC licence holding satellite operators Terrestar Networks and DBSD North America out of bankruptcy protection. The purchases gave Dish access to 40 MHz of 2 GHz S-band spectrum. In a filing to the FCC on 22 August, Dish requested permission to combine the spectrum held by Terrestar and DBSD in order to create a satellite/terrestrial mobile broadband network.
Meanwhile, sister company EchoStar bought the assets of Move Networks, which specialises in large-scale streaming of video over the internet, and acquired Hughes Communications, further focusing on wireless broadband services.
As for DirecTV, the company had said it was bidding for Hulu in order to be able to provide IP-based services alongside its core satellite product. Speaking at the Q2 2011 investor conference call in August, Michael White, DirecTV CEO, said: “I think what we’re looking for is something that would enable us to accelerate our TV everywhere, but obviously I’d say it’s critically dependent on the distribution relationships that it (Hulu) has in the contracts that underpin that. So, there is still more for us to learn and we really haven’t made a final judgment on it.”
Founded in March 2007, Hulu, which was reportedly planning an IPO in late 2010, has been valued at more than US$2bn. Guggenheim Partners and Morgan Stanley were advising the company and its owners on the sales process.
