Post #16 – Why would anyone buy Hulu? Why would the networks sell it?

What in the world are these companies thinking? Why would anyone try to buy a company with no real assets of its own? Why would anyone sell a distribution scheme that’s almost as good as owning a cable system?

Hulu is not worth much without a continuing stream of first run network programming. Period. They’ve done a nice job with the interface but so what? It’s an interface. Unless you’re prepared to spend hundreds of millions in program development or licensing fees, forget it. And even then it’s not a slam dunk without all the promotion the networks give shows and their habitual (if declining) viewership.

It’s impossible to believe that the networks will guarantee that the same programming will be available to Hulu and at a reasonable price in the future. Bidding will push it up – Netflix, Apple, Xbox, who knows? Or the networks could go back to streaming shows on their own sites (not a good choice).

This is a case of wishful thinking at best.

The networks don’t play well together but tough – they need a joint distribution platform like Hulu, which is why they created it in the first place. Viewers prefer to go to one location to see their network shows, just like they do with cable. Hulu fights piracy and decreases losses to fragmentation, if the networks wise up and begin selling ad inventory on Hulu themselves. The need to start using Hulu more intelligently, not fight over it or reap unwise short-term profits.

Walk away everybody.

PS – I guess I’m not the only one who feels this way. I think $2 billion in additional cost is optimistic.
Why would anyone want to own Hulu – The Street.com

7 thoughts on “Post #16 – Why would anyone buy Hulu? Why would the networks sell it?”

  1. Someone will buy it because it’s a vanity business, same reason people keep buying and starting airlines, which hardly ever make money. The owners might sell it because auctions work better with more bidders for their content, and there aren’t that many at the moment. Would anything prevent them from selling, then turning around and recreating another, given that they have the rights to thousands of hours of content? Lather, rinse, repeat. (Also possible there are internal disagreements about splits, as some program costs are escalating faster than others, or about direction, particularly with Aereo expanding or the reluctance of established players to bid against already existing owners of the content up for auction.)

  2. Exactly. They probably won’t be able to start a fresh competitor but they will be able (I bet) to stream from their own sites separately, which is just as bad.

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