Hulu Strikes Tentative Content Deals With Disney, News Corp., Say Sources

6:23 PM PST 06/24/2011 by Paul Bond

The news come as the streaming website is looking for potential buyers.

Hulu has struck tentative deals with Disney and News Corp., according to published reports Friday and people familiar with the matter. Under rules Comcast agreed to when it purchased NBCUniversal, a Hulu deal struck by the other two partners should also apply to NBCU, giving the online streamer a steady stream of premium content from its three primary sources.

The deals, which Hulu and its conglomerate partners would not confirm, are an important step if the online company expects to get top dollar from an acquirer. The company hired a couple of investment banks to help it facilitate a sale after it received an unsolicited offer.

Bloomberg, which first reported that Disney had come to terms with Hulu, said deals with the conglomerate partners should be inked within weeks. Some outlets have reported the new content arrangements will allow for more ads. Typically, a half-hour show on Hulu today includes about a third of the amount of ad time as the same show on traditional TV.

Yahoo and others are reportedly interested in purchasing Hulu, and some experts expect the bidding to approach $3 billion, though not without commitments from Disney, News Corp. and NBCU to supply content for several years out. The fourth partner that must agree to a sale is Providence Equity Partners.

Hulu is on track to post $500 million in revenue this year through ads and premium subscribers, which should number 1 million by year’s end.

UPDATE [6/27, 15:38] For the record: A previous version of this story stated that the private equity firm that owns a stake in Hulu is called Providence Equity Ventures. But actually, it is called Providence Equity Partners.
 

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