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Low-Ball Bids Jeopardize Hulu Auction

Here's a glance at what's turning cable's crank this morning.

  • A wide gap in bids for Hulu LLC -- from as low as US$500 million to as high as $2 billion -- and questions about the Web video hub's long-term value are among several factors that are slowing down, and could possibly derail, the sale of the company, Reuters reports, noting that a new round of bids is due this week. (See Google May Up the Ante for Hulu .)

  • The New York Post takes aim at Canoe Ventures LLC , noting that the cross-MSO advanced ad venture is at a "critical crossroad" after spending more than $150 million over three years without producing much revenue. Canoe, which has access to a footprint of more than 20 million cable homes, tells the paper that it's making great progress, but others say the venture has been hurt by the recent losses of CEO David Verklin and the departure of Steve Burke, a Canoe champion who is now heading NBCUniversal LLC . (See Canoe Adjusts Senior Team and Canoe CEO Steps Overboard.)

    Update: Canoe issued a statement Monday afternoon that identifies some "inaccuracies" in the story, plus an update on some of its projects. We put their full statement on the message board.

  • Cox Communications Inc. will add up to 30 HDTV channels to its tru2way-based Advanced TV Plus tier by year's end using the more efficient MPEG-4 format, reports Multichannel News. Cox estimates that about 10 percent of its installed set-top box base is MPEG-4 capable. (See Cox Guides Tru2way Forward.)

  • Liberty Global Inc. (Nasdaq: LBTY) has closed its acquisition of Aster Sp. z.o.o., Poland's fourth-largest MSO, serving about 368,000 video subs. (See Liberty Buys Aster .)

  • Gadget blogger Dave Zatz got his hands on a 42-inch, broadband-connected Best Buy Co. Inc. Insignia TV outfitted with a TiVo Inc. (Nasdaq: TIVO)-powered interface. A full review is coming, but here are his initial impressions. (See TiVo Gets Inside Best Buy TVs.)



    — Jeff Baumgartner, Site Editor, Light Reading Cable



  • Jeff Baumgartner 12/5/2012 | 4:53:24 PM
    re: Low-Ball Bids Jeopardize Hulu Auction

    ...for questioning the long-term value of Hulu.  The current owners conveniently are the ones that own the content, too. Without some guarantees that I'd have access to this content for a long time, I'd be second-guessing it, too.  Otherwise, you do get a nice publishing platform and interface and a number of subs who take the Plus service, but is that worth $2B? JB

    paolo.franzoi 12/5/2012 | 4:53:24 PM
    re: Low-Ball Bids Jeopardize Hulu Auction

    Isn't the long term value 0?


     


    There is nothing there from a streaming standpoint that can not be recreated.  Unless it came with long term (permanent?) content deals then I don't get that there is any value in Hulu.


     


    seven


     

    AESerm 12/5/2012 | 4:53:23 PM
    re: Low-Ball Bids Jeopardize Hulu Auction

    It's certainly a question of content. It's also the terms of the deals they cut. There were plenty of early skeptics on whether Hulu could go profitabie. What surprised Blodget was the minimal costs Hulu incurred on its revenue splits, with nice boosts to margin. I'd be wondering if those particular deals could be replicated.

    Jeff Baumgartner 12/5/2012 | 4:53:21 PM
    re: Low-Ball Bids Jeopardize Hulu Auction

    Right, it's nothing without the content, of course, and the brand itself carries some value. But there's of course no way to get the owners to agree to some sort of permanent access deal, or even one that rises a set % with each renewal period. Those deals would have to be renegotiated. But if you're looking at Hulu, what's a fair number in terms of years that you'd have access to the content that Hulu has now to make it worth it?  Five years?  10 years?  JB

    craigleddy 12/5/2012 | 4:53:19 PM
    re: Low-Ball Bids Jeopardize Hulu Auction

    Another story worth checking out today: The NY Times reports that Facebook will unveil a media sharing platform on Thursday that "will allow people to easily share their favorite music, television shows and movies, effectively making the basic profile page a primary entertainment hub."


    While primarily aimed at sharing music, it seems this could give a boost to OTT video players. It'll be interesting to see if traditional TV programmers seek to utilize it in some way too. Stay tuned.      


     Link (subscription required?):


    http://www.nytimes.com/2011/09...


     

    Jeff Baumgartner 12/5/2012 | 4:53:15 PM
    re: Low-Ball Bids Jeopardize Hulu Auction

    That NY Post story about Canoe elicited a lengthy statement from Canoe. Here it is.  

    Canoe Ventures

    Statement:  New York Post Story

    September 19, 2011

     

    Today’s story in the New York Post included inaccuracies and failed to offer a balanced perspective on the success of the industry’s advanced television joint venture.  First, Warren Schlichting was never an employee of Canoe Ventures.  He was a Comcast employee who was dedicated in service to Canoe for a period of time more than a year ago, concluding his assignment at Canoe in July 2010.  His recent departure from Comcast has nothing to do with Canoe Ventures. 

    In terms of the overall balance of the story, Canoe’s owners were contacted by the New York Post and provided information that was not used.  Comments from Canoe’s owners about their ongoing commitment were omitted in favor of reporting one critic’s unanswered question about that commitment – specifically speculation about what one Canoe Board member, Comcast’s Neil Smit, might think.  In fact, Neil Smit was quoted about Canoe’s future in June, when Kathy Timko was tapped to lead, and his quote illustrated the Board’s ongoing support and confidence.  With additional commentary provided to the New York Post by both Comcast and Time Warner Cable, the New York Post had answers to this critic’s question of owner commitment, but simply chose not to use them.

    On behalf of the industry, Canoe is pointed against enormous opportunities in advanced television that remain as salient today as when the company was founded.  To-date, industry collaboration through Canoe has resulted in a growing national ITV platform that now includes more than 20 million advanced-use digital cable households.  This represents 20% of the total U.S. multichannel market and 46% of all digital cable households in the nation, including 21 of the top 25 DMAs.  Additionally, Canoe has enabled 7 diverse networks with ITV capabilities, including AMC, Style, E!, Bravo, Discovery, History and USA.  Canoe is poised to launch national dynamic ad insertion for On Demand which will help the industry to appropriately monetize the Free On Demand (FOD) programming offered via this important and highly-used platform.  Canoe continues to grow its portfolio of services, the scale of its offerings, and the roster of networks enabled by our services. 

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