8 Companies Want to Buy the Netflix of Television
Netflix (NASDAQ: NFLX) has made the comeback of a century, quadrupling in value over the last seven months.
This unheard of (and highly unexpected) turnaround story came after Netflix approached $300 per share and then plummeted to the low $50s. It was a painful moment for investors, but they got over it, re-invested in the company and transformed it into one of the year's biggest stars on Wall Street.
Now that Hulu, the Netflix of television, is up for sale again -- and has garnered four million paying subscribers (up from three million last year) -- the rumor mill has been overflowing with reports about the potential new owner.
Who could buy Hulu? Who is most likely to buy the company?
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There are many reasons why Amazon is rumored to be interested in acquiring Hulu.
For starters, Hulu has four million paying subscribers and millions more who tune in for free. Amazon could use both customer bases to further promote its own store brand and increase merchandise sales for its online marketplace.
Hulu also has a growing list of TV shows. Unlike Netflix, which frequently loses movies after content deals expire, Hulu has successfully retained most of its TV collections (such as Grey's Anatomy), all the while increasing the number of single-season collections from ABC and NBC.
Hulu did lose 30 Rock and a few other NBC stalwarts to Comcast's own service, Xfinity Streampix. But after 30 Rock's ratings plunged during the final two seasons, there likely weren't many viewers left to care.
Even so, Hulu has gained more than it has lost, and Amazon has taken notice.Image Source: Wikimedia Commons
The story goes like this: after a failed attempt to buy YouTube several years ago, Yahoo has been on the lookout for a triple-A video site.
For a brief moment, the company hoped that site would turn out to be Dailymotion, one of the biggest and most successful YouTube clones around. That deal did not go as planned, however.
Now Yahoo is taking a second look at Hulu, the leading video site for online television streams.Image Source: Wikimedia Commons
Last October, Province Equity Partners sold its 10 percent stake in Hulu for $200 million. This was a solid win for the company, which had invested $100 million in the company in 2007.
For better or worse, Province may soon be the proud owner of Hulu again.
In April 2012, Province acquired a piece of Chernnin Group for $200 million (yes, the same amount it gained in selling Hulu -- coincidence?). Now Chernin wants to buy some or all of Hulu, which would indirectly provide Province with a piece of the streaming video giant.Image Source: Wikimedia Commons
Are you seeing a trend here? Four of the companies that want to buy Hulu are either connected on some level or employ high-level execs who previously worked for other firms that want to buy Hulu.
Ross Levinsohn is now in charge of Guggenheim Digital Media, a division of Guggenheim Partners -- a $160 billion fund manager. Guggenheim owns a number of high-profile properties, including the Los Angeles Dodgers, The Hollywood Reporter, Billboard and Adweek. He is rumored to be very interested in adding Hulu to Guggenheim's portfolio.Image Source: Wikimedia Commons
The trail has gone cold, but Apple was once a frontrunner for a Hulu acquisition.
Rumors circulated the Web in July 2011 after Bloomberg and other publications reported that Apple was "considering" a bid for Hulu.
While Apple may have backed off after Hulu's owners decided not to sell, there is no reason to believe the Mac maker is not still interested in the company.Image Source: Wikimedia Commons
As one of the creators of Hulu, News Corp. currently owns a 33 percent stake in the firm. It could buy out the rest, however, if a superior deal is not reached.
Why would Disney want to walk away from a site that currently streams the majority of ABC's TV shows? That remains a mystery, but its relationship with Netflix could have something to do with it.Image Source: Wikimedia Commons
There is also the possibility that Disney may take control of Hulu if News Corp. decides to exit.
This is more media speculation than anything else, however. Thus far, Disney has not given any indication that it will buy News Corp. and Comcast's stake in Hulu.
For now, Disney has continued to push its own online video sites, including ABC.com.Image Source: Wikimedia Commons