NYT: Hulu Readying Itself For $2B IPO?

COMMENTS (5)

• Can’t imagine paying for this service; the streaming is terrible and I usually give up halfway through watching something. Once they start charging, they’ll never see me again.

  Comment by Kitty — Monday August 16, 2010 @ 10:41am PDT  Reply to this post

• It’s not as laughable as you might think – for potential buyers of the shares, yes; for the owners, no.

  You gotta remember the world from which Jason Kilar came, which is online, not entertainment. In the online world, you build your buzz until it’s reached fever pitch, and then you try for an IPO to raise a crazy amount of cash. I’m sure they’d love to do this before *real* numbers start coming in on Hulu Plus, because, as a revenue generator, it’s not going to do much for their numbers.

  Still, after two years, Hulu has a great “rep” and general consumer goodwill (there was plenty of grumbling when they announced Hulu Plus, although some of those consumers were being unfair, because Hulu continues to offer everything it always did for free. If anything, Hulu Plus is the rip-off: $10 for content WITH ads in it? What about that is a premium service?) So the time is right to raise cash from the public (and probably for Kilar and others to cash out), whereupon the current partners can install someone they can puppet more effectively. Zucker’s comments about how much he admires Kilar but wishes he were *a little more* concerned about revenue are merely a veiled way of saying, “Jason cares more about building a name for himself than generating better margins for our companies.”

  It’s also a way for FOX/NBCU/ABC to shift financial burden of the service to shareholders (and, potentially, for the combined Comcast-NBCU to unwind itself completely from the deal by selling off its stake once the merger goes through). After Fox/NBCU/ABC are no longer the majority owners, their programming arms can demand higher licenses fees and profit participation from Hulu. Currently, they’re cutting themselves sweetheart deals, even though Hulu is a cord-cutting nightmare for their cable divisions – each of these companies’ largest cash cows.

  Once Hulu is a public company, you better believe the content partners will take off the kid gloves they’ve used to negotiate with Hulu as a start-up joint venture. They’ll clobber them with rate increases just like they do to the cable companies who distribute the programs for “under market value.” But, by that time, the money’s been made: the execs will cash out their equity, the current owners will dilute their ownership and sell off shares at a fever-pitch valuation, and Hulu will be on its way to becoming the Blockbuster of the Internet – and that’s not a good thing.

  Viacom/CBS was smart to stay out of the whole thing. Then again, CBS has Quincy Smith to thank for that, and, in his previous life as a VC and investment banker, Quincy cared more about making money than headlines. CBS Interactive lost a great executive in Mr. Smith.

  Comment by Swarren — Monday August 16, 2010 @ 11:34am PDT  Reply to this post

• I think there’s a typo. Surely you meant $2 not $2B.

  Comment by John — Monday August 16, 2010 @ 1:57pm PDT  Reply to this post

• Are you fucking kidding? The sky is the limit with Hulu. It has a BETTER model for making money than broadcast and cable. You can’t skip commercials on it with a DVR. It’s not a matter of “if” but “when” as far as the internet becoming the primary delivery for television programming. I would invest in it even if it is losing money today.

  Comment by SeanOcali — Monday August 16, 2010 @ 2:31pm PDT  Reply to this post

• Looks like we’ll be seeing a big wave of entertainment-driven tech IPO’s over the next year or so.

  Comment by patrick — Tuesday August 17, 2010 @ 2:23pm PDT  Reply to this post