Either Disney or News Corp will take over Hulu – NWSA, DIS, CMCSA, NFLX, AMZN & CSTR
Northern, WI 03/04/2013 (gdpinsider) – News Corp (NASDAQ:NWSA) and The Walt Disney Company (NYSE:DIS), both partners of the video website Hulu.com are currently in talks that will result in one buying out the other said a person in know of the situation. At the moment the talks are private. Each of the companies hold a 1/3rd stake in Hulu and apart from the sale they are also contemplating a change in the business model. Comcast Corporation (NASDAQ:CMCSA)’s NBC would continue being the minority investor. The federal agreement in context with the approval of Comcast Corporation (NASDAQ:CMCSA)’s NBC Universal acquisition prohibits the company from any board or operational role.
Two investors- two business concepts
Both the main investors prefer working on two different concepts. While The Walt Disney Company (NYSE:DIS) prefers a business model that focuses on advertising, News Corp (NASDAQ:NWSA) prefers Hulu relying on subscriptions.
At the moment, Hulu offers a monthly subscription called Hulu Plus as well as a limited free service, both of which include commercials. The early-stage talks were reported by Wall Street a couple of days ago and the deal is not a guaranteed one. Hulu’s Co-founder and CEO, Jason Kilar will be stepping down from his post in March and all these discussions have come in the wake of this decision.
Hulu that has been formed by Fox and NBC has fewer commercials on its online shows and 2009 saw Disney becoming an investor. Hulu Plus, the premium version was launched in 2010 and offers viewers a larger library of shows. Hulu shows can also be accessed via video-game consoles, web-connected TV sets and mobile devices. The company revenues reached $695 million after climbing 65 percent.
A long way to go
The company is way behind the 30 million worldwide subscribers that Netflix, Inc (NASDAQ:NFLX) currently boasts of. It also faces stiff competition from Amazon.com, Inc (NASDAQ:AMZN), Verizon Communications Inc (NYSE:VZ) and Coinstar, Inc (NASDAQ:CSTR) all of which are emerging players in this niche. Marketers are expected to spend $4.14 billion from the $2.93 billion that was spent on advertising on online video in 2012. Over 30 percent of Americans watched TV shows online in 2012 which were up from 27 percent just a year ago.
Shares of News Corp (NASDAQ:NWSA) went up by 1.16% to close at $29.14
Shares of The Walt Disney Company (NYSE:DIS) went up by 1.36% to close at $55.33
Shares of Comcast Corporation (NASDAQ:CMCSA) went up by 0.60% to close at $40.03
Shares of Netflix, Inc (NASDAQ:NFLX) went up by 0.69% to close at $189.37
Shares of Amazon.com, Inc (NASDAQ:AMZN) went up by 0.56% to close at $265.74
Shares of Verizon Communications Inc (NYSE:VZ) went up by 0.41% to close at $46.72
Shares of Coinstar, Inc (NASDAQ:CSTR) went down by 1.37% to close at $50.49