News Corp., Disney Discussing Strategy, Ownership of Hulu (Report)

 

Rupert Murdoch's News Corp. and the Walt Disney Co. have started talks about the future of online video destination Hulu, which could lead to one of the companies acquiring the other's stake in the site, the Wall Street Journal reported.

The entertainment conglomerates could also end up deciding to sell to an outside firm or simply hold on to their stakes, it said.

Disney and News Corp. have expressed different preferences for Hulu's business model. The former wants the site to concentrate on its advertising-supported free service, while the latter would like it to focus on its subscription business, Hulu Plus.

Each have signaled a willingness to buy out the other company, the Journal, which is owned by News Corp., said.

Each company owns about a third of Hulu, with Comcast's NBCUniversal holding the other third. NBCUniversal is, however, not allowed to vote its stake in company decisions due to requirements put in place as part of regulators' approval of the Comcast-NBCUniversal deal a few years ago.

In 2011, all owners also considered a sale and put Hulu on the auction block, but then held on to their stakes.

Hulu CEO Jason Kilar has said he plans to leave the company by the end of the first quarter. He has pushed for more money from the owners to expand Hulu's licensed programming and original content offers amid competition from the likes of Netflix and Amazon.com.

Hulu, which for the last year reported revenue of nearly $700 million, launched in late 2007 as a joint venture of NBCUniversal and News Corp. Disney came on board in 2009.

A News Corp. spokesman declined to comment. Disney couldn't immediately be reached for comment.

Email: Georg.Szalai@thr.com
Twitter: @georgszalai

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