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Hulu Brings in Billion-Dollar Bids

DirecTV Group Inc. and two other companies are each ready to fork over at least a billion dollars for online video company Hulu LLC, according to Bloomberg. While the bids don't approach Google's offer of up to US$4 billion (with conditions) in 2011, they do set the high-water mark for this latest round of Hulu negotiations. Hulu reported revenue of just under $700 million in 2012, and has more than four million subscribers to its Hulu Plus premium service. It also has plenty of suitors, including Time Warner Cable Inc., Yahoo Inc. and former News Corp. President Peter Chernin, among others. (See Time Warner Cable Linked to Hulu Bid.) In 2011, DirecTV competitor Dish Network Corp. was one of the leading candidates for a Hulu buyout alongside Google. That deal would have added significantly to Dish's famous acquisition of the Blockbuster movie rental chain, which also happened in 2011. Dish's plan was to turn the Blockbuster assets into an online Netflix Inc. competitor, but Chairman of the Board Charlie Ergen gave up the dream in late 2012. (See Dish, Google Close In on Hulu and Cox Aligns with New Starz Streams.) Unlike Blockbuster, Hulu doesn't have the baggage of bricks-and-mortar retail stores. It also has that significant built-in online subscriber base. While Hulu has declined acquisition offers in the past, the bidding war now underway increases the likelihood that current owners Walt Disney Co., News Corp, and Comcast Corp. will agree to sell this time around. Hulu's board is reportedly working to whittle down the number of buyout offers under consideration from seven to three or four in the next few weeks. — Mari Silbey, Special to Light Reading Cable
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