AT&T Joins Hulu Sweepstakes
By joining forces with AT&T Inc., former News Corp. President Peter Chernin has gained a major last-minute boost in his bid for online video service Hulu LLC, which he founded several years ago while still at News Corp.
According to Bloomberg, AT&T added its weight to Chernin's bid, and the two submitted a proposed buyout offer for Hulu before bidding officially closed on Friday. DirecTV Group Inc., Time Warner Cable Inc., Yahoo Inc. and Guggenheim Digital Media are among the other suitors vying for ownership of the popular online video site, which could fetch at least US$1 billion once the auction concludes.
AT&T has good reason to lust after Hulu. The major video providers are all building up their online offerings, hoping to bridge the gap between traditional TV watching and increased over-the-top (OTT) viewing on connected devices such as laptops, tablets, and game consoles. In addition to launching TV Everywhere offerings, Verizon Communications Inc. has invested heavily in Redbox Instant, and Comcast Corp. has introduced online video service Streampix. (See Verizon/Redbox Take a Swing at Netflix and Comcast Goes OTT to Target Netflix, Hulu Plus.)
DirecTV and two other companies have reportedly bid at least $1 billion for Hulu. The Chernin Group's initial bid was "around $500 million," but that number is presumably much higher now with AT&T on Chernin's ticket. (See Hulu Brings in Billion Dollar Bids.)
Although Hulu isn't profitable, the site did bring in close to $700 million in revenue in 2012, thanks to advertising and subscription fees. Hulu is currently owned by Walt Disney Co., News Corp, and Comcast, but Comcast gave up control when it bought NBC Universal under an agreement with federal regulators.
— Mari Silbey, special to Light Reading Cable