Bit Rate

Hulu: Worthless or Priceless?

10/14/2011 6:54 AM

Now that Hulu’s parents have decided not to disown their baby, the question is: Were the bids too low (i.e., the market believes it’s less valuable than the sellers do) or is Hulu too valuable to part with? (See Hulu Auction Off and Hulu Rumor Mill: It’s Down to Google and Dish.)

I think the broadcasters mainly didn’t want to put Hulu in the wrong hands. Someone like Google or Amazon might have easily turned it into a credible over-the-top rival to pay TV (well, “easily” being a relative term). In any case, Hulu would (and will) continue to keep viewers away from the ad-supported catch-up video at NBC.com, ABC.com and Fox.com.

How ironic would it have been if the Huluan’s project morphed into the ultimate cord-cutting Frankenstein’s monster?

“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,” three of the JV’s partners — News Corp., Providence Equity Partners, The Walt Disney Co. — said in their statement yesterday. Note that Comcast/NBCU, the fourth partner, wasn’t included on the statement; as an FCC condition of its deal for NBCU, Comcast doesn’t have a voting share of Hulu.

CBS CEO Les Moonves has basically boasted of his refusal to join the Hulu dance, saying at the Paley Center’s International Council conference last month, “We protect the family jewels.”

In the Hulu model, ceding control of content for long stretches of time to a third party doesn’t make sense, Moonves said: “We keep 100 cents of every dollar, not like the Hulu guys do.”

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Programming Note! Don’t miss the Multichannel News breakfast panel discussion at SCTE Cable-Tec Expo 2011 in Atlanta, Video’s Next Act: Setting the Multiscreen Stage, on Tuesday, Nov. 15, right before the opening general session. Click here for more info: www.multichannel.com/SCTE2011