Is Hulu Still for Sale?
It seems as if Hulu's studio owners won't be getting the big money that they were hoping for.
BusinessInsider.com is reporting that DISH Network (NAS: DISH) is offering $1.9 billion for the video-streaming site, and that's apparently enough to trump rival bidders Amazon.com (NAS: AMZN) and Yahoo! (NAS: YHOO) .
Now, there are plenty of good reasons why Hulu isn't generating bids in excess of $2 billion.
- Hulu is a proven platform, but what is it without content? The three studio partners reportedly aren't willing to offer long-term streaming deals.
- Netflix (NAS: NFLX) shaved its third-quarter guidance for streaming subscribers by 200,000 earlier this month. If the leader in premium streaming is struggling, what are Hulu's chances?
- The bidders are making things happen on their own. DISH rolled out a pseudo-streaming service last week. Amazon beefed up its licensed streaming content yesterday.
- Yahoo! is on an interim CEO, so it's unlikely to stick its neck too far out on a deal that would eat deeply into its cash reserves.
It also doesn't help that bidders know that its investors want out.
Google (NAS: GOOG) is rumored to be offering big money, but it wants broader content rights. Antitrust regulators that are already weary of Big G's growing ways may also have a hard time clearing the YouTube parent for the purchase.
Hulu doesn't have a whole lot of options, so don't be surprised if it settles for DISH and moves on.
At the time this article was published The Motley Fool owns shares of Google and Yahoo.Motley Fool newsletter serviceshave recommended buying shares of Netflix, Yahoo!, Amazon.com, and Google, as well as creating a bear put spread position in Netflix. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.Longtime Fool contributorRick Munarrizcalls them as he sees them. He does not own shares in any of the stocks in this story except for Netflix. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.