Buying Hulu is a Bad Idea for any Company

Sep 8, 2011
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There are times when I sit here and see the latest reports on the news and scratch my head. That has happened quite often as of late as the growing number of reports and rumors come in on all the companies looking to buy streaming-video provider Hulu.

Earlier this year, Yahoo reportedly approached Hulu to inquire about a possible acquisition. Soon after, Hulu decided to enlist the help of investment banks and try to find as many potential suitors as possible to drum up a higher acquisition price. Now, the company has reportedly received some bids from Amazon, Yahoo, and Dish Network. Google is also involved in the bidding.

Is it just me or does all of this sound like a bad dream?

Let’s think about Hulu for a minute. This is a service that most would agree, is overrun with commercials. It’s also a service that’s led by ABC, Fox, and NBC, three companies that don’t have the highest regard for the changing ways in which people enjoy entertainment content nowadays. In fact, Fox recently implemented a deal to offer its content to Hulu eight days after shows air. Previously, the company brought its shows to the service the next day.

But that’s not all. Hulu CEO Jason Kilar has been especially outspoken over the years about the issues his company has in getting content providers to warm to the idea of bringing their programming or movies to the service. They seemingly don’t see value in what Hulu is offering, and they’re often unwilling to change their ways.

And yet, Amazon, Yahoo, Dish Network, and Google want to get involved with all that. What a bad idea.

The way I see it, Hulu’s investors are trying to squeeze every last dime out of the company’s would-be buyers. And when they think they have all that they can get, they’ll sell the company without thinking twice.

And only then will the fun begin. Whichever company acquires Hulu will undoubtedly require the investors -- at the very least -- to agree to some sort of content partnership. After that term is up, however, who knows how long those providers will stick with Hulu? After all, they’ve gotten their cash, and everyone knows they can’t stand online streaming. What would make them want to stay beyond the required term?

I can’t help but wonder if the companies trying to acquire Hulu are chasing after something that they will never be able to fully capitalize on. For a while, things might be status quo at Hulu. But over time, I see nothing but bad times ahead for whichever firm buys the streaming service.

Hulu is no Netflix. And it never will be. It’s about time Yahoo and the others that are reportedly willing to drop billions into Hulu remember that.


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