7 ms·

Google in preliminary talks to buy Hulu

91 points by trustfundbaby 15y ago

danjones 15y ago
"Two of the media companies behind the online video service, Walt Disney Co. and News Corp., recently renewed licensing agreements to make Hulu more attractive for a sale." Providing the other networks will follow suite this looks to be a great opportunity, though I do wonder how it will play in with their services
- jimbobob 15y ago
  They already have the three major networks. NBC/Universal (Comcast) is obligated to provide the same thing as the other partners due to the Justice Dept's rules regarding the takeover. http://techcrunch.com/2011/01/18/comcast-nbc-merger-the-hulu-rules/ http://techcrunch.com/2011/01/18/comcast-nbc-merger-the-hulu...
nextparadigms 15y ago
I think it would be a very good fit with them. But they need to make sure they won't get screwed by the networks later, when they won't care what happens to Hulu once they've sold it. Their incentive might be to kill it so they keep making money from normal advertising, rather than Hulu's online advertising. But this is also an opportunity to strengthen their relationship with them, and get them to support Google TV. EDIT: They can also do a lot of cool stuff to it, like integrating Google+ with it, for social viewing. Imagine Hangouts with Hulu...
- hebejebelus 15y ago
  WRT your edit: This reminds me of a service idea I had a while back which I shelved for far too many reasons: A site/chatroom-esque thing where you can invite people to watch things with you over the net (inspired by my long-distance relationship at the time). I'd originally thought of Megavideo, but youtube movies was even better (read: more legal). Advertising would have been fairly well-targeted, judging by the video these people were watching. Free idea, anyone?
  - tartuffe78 15y ago
    The Colbert Report (via colbertnation.com) had/has something like this. It prompted me to try it when I was watching an episode, basically you wait for a room to fill up with people, then it plays to all of you while you chat. Obviously you can't pause, which bothered me as I am usually doing two things at once while watching something online
  - necubi 15y ago
    This actually is a feature of Google+. When in a "hangout" (the video chat service) anyone can push a youtube video to the group, which can then be watched by everybody together. Chat, audio and video continue underneath, so you can discuss what's going on.
- joelhaus 15y ago
  > they need to make sure they won't get screwed by the networks later, when they won't care what happens to Hulu EXACTLY. To make this work Google would need to tie an incentive scheme into the sales contract. Perhaps the combined momentum of TV over IP and an earn-out or overly-generous ad revenue deal would persuade the TV networks? Alas, these same broadcasters still rely heavily on fees received from the cable operators (e.g. News Corp, et. al. threaten Time Warner Cable for higher fees before the Superbowl), but one can hope. P.S. For some history on the Hulu IPO-turned-sale, this comment has some numbers/references: http://news.ycombinator.com/item?id=2685965 http://news.ycombinator.com/item?id=2685965
MatthewPhillips 15y ago
Don't most content deals have a clause that invalidates them in case the company gets sold? Don't the networks hate Google (see Google TV as an attempt to get their content on televisions for free)? Doesn't Google already own a video streaming company?
hammock 15y ago
This would basically amount to Google paying for Hulu to be shut down. Who would buy Hulu? We know that its backers - NBCU (Comcast/GE), Fox (News Corp), and Disney/ABC - are not making as nearly as much money off of it as they want to. As a result, if they sell it off they are unlikely to support their content being on there even with the fees, since the fees Hulu is able to generate are not adequate. The only reason I can see that Google would be interested in Hulu would be because it competes with Youtube. Because as soon as Hulu loses its media backers it appears doomed to go straight into the ground.
- maukdaddy 15y ago
  I dunno, I actually see this complementing and strengthening YouTube. Assuming Google can keep the content, it would make YouTube the place to go for both funny videos and network TV. Google has been working for a while to get more "programming" on YouTube an this would be one hell of a way to accomplish that goal.
- bproper 15y ago
  Way off base. Google is aiming to be a dominant player in the web TV space and compete directly with Comcast, Time Warner, etc. They have had trouble securing content deals with the big networks. Hulu would be their Trojan Horse to get premium content onto the Google TV platform. I'm not saying their strategy will work, or that the networks would approve them as a bidder, but they are clearly not aiming to run Hulu into the ground. http://www.betabeat.com/2011/07/01/hulu-could-be-googles-trojan-horse-to-get-inside-the-tv-biz/ http://www.betabeat.com/2011/07/01/hulu-could-be-googles-tro...
  - hammock 15y ago
    The question is whether they would be able to hang onto the content, at a reasonable rate. Remember, Hulu is not a startup it is owned by the content distributors themselves. For sure Google will be charged more than the guys are charging themselves right now. And even now Hulu isn't making a very good ROI. I'm not rooting against Google, if they can integrate it with their other offerings in a way that adds value, more power to them.
protomyth 15y ago
I guess the could transition Hulu into a pure subscription platform and use youtube as the ad supported platform. Move premium Youtube content over to Hulu and integrate search so Hulu results show in Google.
e1ven 15y ago
In Levy's "In the Plex", he writes about Google's original idea getting into video- They wanted to lay down with the content industry in much the same way that Hulu is now. Have all syndicated content, ads, the works. They tried it with Google Video, and had a hard time signing the deals, and getting things done. Youtube was kicking their ass. So they bought Youtube, and it's continued to explode. In their hearts, I have to believe that Google still wants to make that work. They've flirted with this a few times; Startrek/etc are on Youtube, and Google Video still has premium content. Adding Hulu into the mix would give them the content/partner deals to run 1st-run, major studio content on their platform. They could segment; Leave Youtube for viral/crowd/user videos, and Hulu for more "professional" videos. Google Video, and Google.com would shows results from both when you video search. It'd be brilliant. Edit- Clarified wording.
- deleted 15y ago
  [deleted]
  - e1ven 15y ago
    Sorry, I was writing badly. I've edited above for clarity.
- gte910h 15y ago
  The issue is: Whenever you do a buy like this, all the customers of the service get to jump ship if they want to. So you don't necessarily get the network contracts by buying them.
  - wtracy 15y ago
    Depends on what contracts they've signed, what their termination clauses are, and when they expire. Most likely, the networks do have contracts such that they can jump ship at will.
    - gte910h 15y ago
      I'm guessing it's not "at will" with no penalty but "in the event of ownership changes, non-payment, or with X noticed for the payment of Y liquidated damages', with Y being really large (and you can tell from the announcements that have come out of hulu the contracts have terms).
ben1040 15y ago
I assume that if this is true, this would be evidence of them putting a lot of money on the "re-launch" of Google TV. Google TV was a bomb for me when the cool unified streaming TV search feature didn't actually work in reality, because Hulu blocked it. Buying them out and integrating it is one way to solve that problem.
drivingmenuts 15y ago
Well, it's certainly not for their crap content or the ads Hulu shows despite being a paid service. Do they have enough customers to matter anymore? It's not like the goodwill of media companies is worth anything.
- gte910h 15y ago
  Lots of people still use it, are you sure adoption is going down? Hulu+ is pretty popular in my circles.
3am 15y ago
Remember Google Fiber for Communities when you read this. I would be very concerned if I was a cable company. Google would probably be happy enough to give a la carte TV via Hulu and high speed internet for little/no profit as another ad platform.
- chc 15y ago
  Assuming they can get the content. That's a big assumption to make just as the content companies are giving up on Hulu.

91 points by trustfundbaby 15y ago

"Two of the media companies behind the online video service, Walt Disney Co. and News Corp., recently renewed licensing agreements to make Hulu more attractive for a sale." Providing the other networks will follow suite this looks to be a great opportunity, though I do wonder how it will play in with their services

jimbobob 15y ago
They already have the three major networks. NBC/Universal (Comcast) is obligated to provide the same thing as the other partners due to the Justice Dept's rules regarding the takeover. http://techcrunch.com/2011/01/18/comcast-nbc-merger-the-hulu-rules/ http://techcrunch.com/2011/01/18/comcast-nbc-merger-the-hulu...

nextparadigms 15y ago

I think it would be a very good fit with them. But they need to make sure they won't get screwed by the networks later, when they won't care what happens to Hulu once they've sold it. Their incentive might be to kill it so they keep making money from normal advertising, rather than Hulu's online advertising. But this is also an opportunity to strengthen their relationship with them, and get them to support Google TV. EDIT: They can also do a lot of cool stuff to it, like integrating Google+ with it, for social viewing. Imagine Hangouts with Hulu...

hebejebelus 15y ago
WRT your edit: This reminds me of a service idea I had a while back which I shelved for far too many reasons: A site/chatroom-esque thing where you can invite people to watch things with you over the net (inspired by my long-distance relationship at the time). I'd originally thought of Megavideo, but youtube movies was even better (read: more legal). Advertising would have been fairly well-targeted, judging by the video these people were watching. Free idea, anyone?
- tartuffe78 15y ago
  The Colbert Report (via colbertnation.com) had/has something like this. It prompted me to try it when I was watching an episode, basically you wait for a room to fill up with people, then it plays to all of you while you chat. Obviously you can't pause, which bothered me as I am usually doing two things at once while watching something online
- necubi 15y ago
  This actually is a feature of Google+. When in a "hangout" (the video chat service) anyone can push a youtube video to the group, which can then be watched by everybody together. Chat, audio and video continue underneath, so you can discuss what's going on.
joelhaus 15y ago
> they need to make sure they won't get screwed by the networks later, when they won't care what happens to Hulu EXACTLY. To make this work Google would need to tie an incentive scheme into the sales contract. Perhaps the combined momentum of TV over IP and an earn-out or overly-generous ad revenue deal would persuade the TV networks? Alas, these same broadcasters still rely heavily on fees received from the cable operators (e.g. News Corp, et. al. threaten Time Warner Cable for higher fees before the Superbowl), but one can hope. P.S. For some history on the Hulu IPO-turned-sale, this comment has some numbers/references: http://news.ycombinator.com/item?id=2685965 http://news.ycombinator.com/item?id=2685965

MatthewPhillips 15y ago

Don't most content deals have a clause that invalidates them in case the company gets sold? Don't the networks hate Google (see Google TV as an attempt to get their content on televisions for free)? Doesn't Google already own a video streaming company?

hammock 15y ago

This would basically amount to Google paying for Hulu to be shut down. Who would buy Hulu? We know that its backers - NBCU (Comcast/GE), Fox (News Corp), and Disney/ABC - are not making as nearly as much money off of it as they want to. As a result, if they sell it off they are unlikely to support their content being on there even with the fees, since the fees Hulu is able to generate are not adequate. The only reason I can see that Google would be interested in Hulu would be because it competes with Youtube. Because as soon as Hulu loses its media backers it appears doomed to go straight into the ground.

maukdaddy 15y ago
I dunno, I actually see this complementing and strengthening YouTube. Assuming Google can keep the content, it would make YouTube the place to go for both funny videos and network TV. Google has been working for a while to get more "programming" on YouTube an this would be one hell of a way to accomplish that goal.
bproper 15y ago
Way off base. Google is aiming to be a dominant player in the web TV space and compete directly with Comcast, Time Warner, etc. They have had trouble securing content deals with the big networks. Hulu would be their Trojan Horse to get premium content onto the Google TV platform. I'm not saying their strategy will work, or that the networks would approve them as a bidder, but they are clearly not aiming to run Hulu into the ground. http://www.betabeat.com/2011/07/01/hulu-could-be-googles-trojan-horse-to-get-inside-the-tv-biz/ http://www.betabeat.com/2011/07/01/hulu-could-be-googles-tro...
- hammock 15y ago
  The question is whether they would be able to hang onto the content, at a reasonable rate. Remember, Hulu is not a startup it is owned by the content distributors themselves. For sure Google will be charged more than the guys are charging themselves right now. And even now Hulu isn't making a very good ROI. I'm not rooting against Google, if they can integrate it with their other offerings in a way that adds value, more power to them.

protomyth 15y ago

I guess the could transition Hulu into a pure subscription platform and use youtube as the ad supported platform. Move premium Youtube content over to Hulu and integrate search so Hulu results show in Google.

e1ven 15y ago

In Levy's "In the Plex", he writes about Google's original idea getting into video- They wanted to lay down with the content industry in much the same way that Hulu is now. Have all syndicated content, ads, the works. They tried it with Google Video, and had a hard time signing the deals, and getting things done. Youtube was kicking their ass. So they bought Youtube, and it's continued to explode. In their hearts, I have to believe that Google still wants to make that work. They've flirted with this a few times; Startrek/etc are on Youtube, and Google Video still has premium content. Adding Hulu into the mix would give them the content/partner deals to run 1st-run, major studio content on their platform. They could segment; Leave Youtube for viral/crowd/user videos, and Hulu for more "professional" videos. Google Video, and Google.com would shows results from both when you video search. It'd be brilliant. Edit- Clarified wording.

deleted 15y ago
[deleted]
- e1ven 15y ago
  Sorry, I was writing badly. I've edited above for clarity.
gte910h 15y ago
The issue is: Whenever you do a buy like this, all the customers of the service get to jump ship if they want to. So you don't necessarily get the network contracts by buying them.
- wtracy 15y ago
  Depends on what contracts they've signed, what their termination clauses are, and when they expire. Most likely, the networks do have contracts such that they can jump ship at will.
  - gte910h 15y ago
    I'm guessing it's not "at will" with no penalty but "in the event of ownership changes, non-payment, or with X noticed for the payment of Y liquidated damages', with Y being really large (and you can tell from the announcements that have come out of hulu the contracts have terms).

ben1040 15y ago

I assume that if this is true, this would be evidence of them putting a lot of money on the "re-launch" of Google TV. Google TV was a bomb for me when the cool unified streaming TV search feature didn't actually work in reality, because Hulu blocked it. Buying them out and integrating it is one way to solve that problem.

drivingmenuts 15y ago

Well, it's certainly not for their crap content or the ads Hulu shows despite being a paid service. Do they have enough customers to matter anymore? It's not like the goodwill of media companies is worth anything.

gte910h 15y ago
Lots of people still use it, are you sure adoption is going down? Hulu+ is pretty popular in my circles.

3am 15y ago

Remember Google Fiber for Communities when you read this. I would be very concerned if I was a cable company. Google would probably be happy enough to give a la carte TV via Hulu and high speed internet for little/no profit as another ad platform.

chc 15y ago
Assuming they can get the content. That's a big assumption to make just as the content companies are giving up on Hulu.