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Can anyone explain why Hulu wants to sell to a third party? I understand there's infighting according to the article, but it's unclear to me why one of the owne

Can anyone explain why Hulu wants to sell to a third party? I understand there's infighting according to the article, but it's unclear to me why one of the owners doesn't buy out the rest. Is there some general principle behind not selling to your competitors and choosing a party currently without a huge stake in television or movies like Yahoo? I'm curious about both reasons specific to this particular deal and general principles behind selling to third parties.

Retric 13y ago
It's all about licencing. "In 2011, Hulu’s owners put the company up for sale and were looking for a bid of at least $2 billion; in exchange, they would offer content licenses that would run for two to three years." "Last month, former News Corp. COO Peter Chernin submitted a starting bid of $500 million, with the understanding that he would be willing to pay more for extended licenses." Basically, a huge chunk of Hulu's value is having a wide selection of content. At the same time the people doing the highest value licencing also own the content. Right now they can play an accounting game and lower the licencing costs to make it look profitable sell and then raise their licencing costs. Effectively it's the same money because they own the company as long as all the owners agree to a sweetheart deal. Unfortunately for them they are having some issue deciding just how much everyone should discount there content to make Hulu look better. However, nobody got suckered into there 2 billion dollar shell game.
- samstave 13y ago
  I have had a Hulu account for the last two years. I recently canceled it. Their content is actually not that good, and on top of it, you're forced to watch commercials as well. The service was terrible.
  - JoshGlazebrook 13y ago
    That never really made sense to me either. If you're going to pay for hulu, you would expect to not have to sit through the commercials.
    - meepmorp 13y ago
      > That never really made sense to me either. It makes perfect sense. Money from subscriptions is good; extra money from ads is better. And as much as you or I dislike it, we're probably in a minority position here - if it was really cutting into earnings, they'd have cut it out by now.
      - Supermighty 13y ago
        Hulu having ads isn't about the money they make. It's about keeping ads as normal in peoples minds. If Netflix and Hulu and any other online only vod dropped all ads then people might start to resent ads, and seem them as abnormal. Then people will watch less network and cable TV, which need ads.
        trhtrsh 13y ago
        Most of Netflix doesn't have ads.
        zwily 13y ago
        Are there any ads on Netflix? I can't think of any.
        johneth 13y ago
        There's product placement in some programmes, for example the Netflix-produced House of Cards contains jarring product placement for the Playstation Vita.
        DanBC 13y ago
        That was surprising and disappointing. I guess they need product placement, but some of the Playstation stuff was a bit heavy handed and ham fisted.
        13y ago
  - Moto7451 13y ago
    I've never understood why people dislike the commercials so much. Most of their half hour (21 minute) shows only contain at most three minutes of commercials spread through the show. At worse you're sitting through a minute break from the show. People pay $100+ per month and seem to live through tens of minutes of commercials per show. Plus is about having device and HD access more than anything. I like it as I get far more content from it than I can over the air and I refuse to pay $60-100/month for cable/satellite.
    - Supermighty 13y ago
      Commercials break the flow of the TV/movie that I'm watching. It's the same reason I don't watch the networks or cable TV. It's a Netflix life for me.
      - trhtrsh 13y ago
        TV shows are written in "acts", they are designed to be broken up. Ads may be a horrible distruption (so I suggest muting them and blocking or averting from the images), but for a good TV experience, you should take a break for a minute to let the previous act sink in before watching the next act.
        lobster_johnson 13y ago
        So what about when TV shows are released on DVD/BluRay? Are we are to guess when the act ends and the next one starts? Sorry, but I don't buy this. An episode of, say, Breaking Bad does not need several-minute "act breaks" to work, so that something will "sink in". There is no series in existence so intellectually or emotionally overwhelming that one needs ad breaks to deal with them. (Though admittedly I frequently have to pause shows like Curb Your Enthusiasm because I need some fresh air after all the social embarrassment, but that's different.)
    - mortehu 13y ago
      > I've never understood why people dislike the commercials so much. Many people are making so much money that the cost of TV shows will never be an issue, if only someone were willing to sell it to them. They still only have 24 hours in a day, and they are being shown ads they have seen many times before, and those ads weren't interesting in the first place. TV users can easily use a DVR to skip ads.
- anoncow 13y ago
  So yahoo must be thinking of getting a bargain licensing deal for 2-3 years, with eventually aiming for yahoo-backed content(like netflix and arrested development and firefly) and hulu owners must be looking at cutting losses.
photorized 13y ago
Because they are losing money.

Retric 13y ago

It's all about licencing. "In 2011, Hulu’s owners put the company up for sale and were looking for a bid of at least $2 billion; in exchange, they would offer content licenses that would run for two to three years." "Last month, former News Corp. COO Peter Chernin submitted a starting bid of $500 million, with the understanding that he would be willing to pay more for extended licenses." Basically, a huge chunk of Hulu's value is having a wide selection of content. At the same time the people doing the highest value licencing also own the content. Right now they can play an accounting game and lower the licencing costs to make it look profitable sell and then raise their licencing costs. Effectively it's the same money because they own the company as long as all the owners agree to a sweetheart deal. Unfortunately for them they are having some issue deciding just how much everyone should discount there content to make Hulu look better. However, nobody got suckered into there 2 billion dollar shell game.

samstave 13y ago
I have had a Hulu account for the last two years. I recently canceled it. Their content is actually not that good, and on top of it, you're forced to watch commercials as well. The service was terrible.
- JoshGlazebrook 13y ago
  That never really made sense to me either. If you're going to pay for hulu, you would expect to not have to sit through the commercials.
  - meepmorp 13y ago
    > That never really made sense to me either. It makes perfect sense. Money from subscriptions is good; extra money from ads is better. And as much as you or I dislike it, we're probably in a minority position here - if it was really cutting into earnings, they'd have cut it out by now.
    - Supermighty 13y ago
      Hulu having ads isn't about the money they make. It's about keeping ads as normal in peoples minds. If Netflix and Hulu and any other online only vod dropped all ads then people might start to resent ads, and seem them as abnormal. Then people will watch less network and cable TV, which need ads.
      - trhtrsh 13y ago
        Most of Netflix doesn't have ads.
        zwily 13y ago
        Are there any ads on Netflix? I can't think of any.
        johneth 13y ago
        There's product placement in some programmes, for example the Netflix-produced House of Cards contains jarring product placement for the Playstation Vita.
        DanBC 13y ago
        That was surprising and disappointing. I guess they need product placement, but some of the Playstation stuff was a bit heavy handed and ham fisted.
        13y ago
- Moto7451 13y ago
  I've never understood why people dislike the commercials so much. Most of their half hour (21 minute) shows only contain at most three minutes of commercials spread through the show. At worse you're sitting through a minute break from the show. People pay $100+ per month and seem to live through tens of minutes of commercials per show. Plus is about having device and HD access more than anything. I like it as I get far more content from it than I can over the air and I refuse to pay $60-100/month for cable/satellite.
  - Supermighty 13y ago
    Commercials break the flow of the TV/movie that I'm watching. It's the same reason I don't watch the networks or cable TV. It's a Netflix life for me.
    - trhtrsh 13y ago
      TV shows are written in "acts", they are designed to be broken up. Ads may be a horrible distruption (so I suggest muting them and blocking or averting from the images), but for a good TV experience, you should take a break for a minute to let the previous act sink in before watching the next act.
      - lobster_johnson 13y ago
        So what about when TV shows are released on DVD/BluRay? Are we are to guess when the act ends and the next one starts? Sorry, but I don't buy this. An episode of, say, Breaking Bad does not need several-minute "act breaks" to work, so that something will "sink in". There is no series in existence so intellectually or emotionally overwhelming that one needs ad breaks to deal with them. (Though admittedly I frequently have to pause shows like Curb Your Enthusiasm because I need some fresh air after all the social embarrassment, but that's different.)
  - mortehu 13y ago
    > I've never understood why people dislike the commercials so much. Many people are making so much money that the cost of TV shows will never be an issue, if only someone were willing to sell it to them. They still only have 24 hours in a day, and they are being shown ads they have seen many times before, and those ads weren't interesting in the first place. TV users can easily use a DVR to skip ads.
anoncow 13y ago
So yahoo must be thinking of getting a bargain licensing deal for 2-3 years, with eventually aiming for yahoo-backed content(like netflix and arrested development and firefly) and hulu owners must be looking at cutting losses.

photorized 13y ago

Because they are losing money.