Are Hulu's Owners Crazy?
Shares of Netflix surged to a new 52-week high Friday, as Hulu's owners decided not to sell after all.
"Hulu has emerged as one of the most consumer-friendly, technologically innovative viewing platforms in the digital era. As its evolution continues, Disney and its partners are committing resources to enable Hulu to achieve its maximum potential," Walt Disney chief Robert Iger said in a statement.
Those "partners" include 21st Century Fox and NBCUniversal. All three of Hulu's owners had been trying to sell the service to a variety of bidders, most recently DIRECTV.
But now Hulu's owners want to revisit the business and will invest $750 million to improve its prospects. Perhaps a greater emphasis on original programming is in order? Netflix has enjoyed fatter profits and surging subscriber growth since making the decision to fund new shows.
For his part, Fox President and Chief Operating Officer Chase Carey said that his company is "fully aligned" with Disney in its vision and goals for Hulu. NBCUniversal is a silent partner in Hulu, giving up voting interests as a condition of its merger with Comcast.
So now Hulu gas $750 million to play with. But is this really bad news for Netflix and streaming peer Amazon.com? Don't bet on it. Hulu was always going to get more resources.
The game hasn't changed. Only now, Hulu's owners have more to lose.
The on-again, off-again Hulu sweepstakes is just the latest in a series of shifts in the television landscape is changing quickly. Will traditional networks survive as they are today? Who will emerge if they don't? The Motley Fool's new free report "Who Will Own the Future of Television?" details the risks and opportunities in TV. Click here to read the full report!
The article Are Hulu's Owners Crazy? originally appeared on Fool.com.Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Netflix and Walt Disney at the time of publication. He was also long Jan. 2014 $50 Netflix call options. Check out Tim's Web home and portfolio holdings, or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool recommends Amazon.com, DIRECTV, Netflix, and Walt Disney and owns shares of Amazon.com, Netflix, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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