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DirecTV, two others bid over $1 billion for Hulu: source

Michael White, CEO of DirecTV, speaks during the Reuters Media and Technology Summit in New York, June 11, 2012. REUTERS/Keith Bedford

Michael White, CEO of DirecTV, speaks during the Reuters Media and Technology Summit in New York, June 11, 2012.

Credit: Reuters/Keith Bedford

Sat Jun 1, 2013 8:23am EDT

(Reuters) - Satellite operator DirecTV and two other bidders have offered more than $1 billion apiece to buy Hulu, a source with knowledge of the bidding process said on Friday, increasing the likelihood that owners News Corp and Walt Disney Co will be able to shed the video streaming service they failed to sell in 2011.

Hulu board members, who are being advised by Guggenheim Partners on the auction, fielded at least seven buyout offers last week, the source said.

That number will be whittled down in the next two or three weeks, the source told Reuters on condition of anonymity because the process was private.

It was unclear which two other bidders offered $1 billion for Hulu. The service has more than 4 million subscribers and generates revenue of about $700 million through subscriptions and a free ad-supported service.

The proposed price tag heightens the likelihood that News Corp and Disney will find an acceptable offer price, which was the sticking point of the 2011 round of buyout negotiations.

DirecTV spokesman Darris Gringeri declined to comment, as did Meredith Kendall, a spokeswoman for Hulu. Bloomberg first reported the news on Friday.

Sources have said the other bidders are Yahoo, former News Corp president Peter Chernin, private equity firm KKR, cable operator Time Warner Cable, Guggenheim Digital, and Silver Lake Management and talent agency William Morris Endeavor Entertainment in a joint bid.

Cable company Comcast is the third owner of Hulu alongside News Corp and Disney, but is precluded from an operational role as a condition imposed on it upon its acquisition of NBC Universal in 2011.

(Reporting By Ronald Grover and Liana B. Baker; Editing by Toni Reinhold)

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Comments (3)
tatman wrote:
Hulu has two major flaws that needs to be fixed before it will ever be a serious player in the streaming world: its media license system and its ad system. unfortunately, subscribers who pay a hulu plus fee equal to netflix’s are not immune to shows packed full of ads on hulu plus. i found this to be an extreme irritant, especially since their ad algorithm is seriously flawed and randomly spits ads throughout the programs, often cutting of lines of dialog and interrupting pivotal scenes. and i payed $8.95 a month for THAT? for a while, i did. :( but, the real deal killer for me was when i found that 90% of the content on hulu is available for computer viewing only. when i tried to watch it on my tv (which was the original purpose — to assist in creating a network of streaming services to replace directv satellite tv subscription) i was horribly disappointed. only old shows, out of date material, and a bunch of crap not worth time browsing through was extended as a tv streaming alternative. i had to do searches through hulu’s FAQ system to find out why (they make sure not to put this information up front and easy to see when you begin your subscription).

i also resented viacom/directv for using hulu as a pawn in their spat against each other. when viacom cut off programs on the directv network, directv spammed the crap out of its subscribers via the airwaves on how horrible viacom was, and encouraged people to seek out services such as hulu to watch the shows that were canceled from their lineups. then viacom pulled the shows from hulu to show it has monopoly power and to discredit directv and reinforce its price fixing. was an ugly moment and forever poisoned the well for cable/satellite tv providers imho. was one of the final straws (on top of abominable customer service and numerous price hikes) that has pushed me into the direction of web-based entertainment alternatives.

overall, hulu plus in its current form sucks. netflix has proved to be a worthwhile investment, and with amazon prime, make up for the numerous letdowns from hulu. if directv ends up to the buyer (the cable service i’m trying to get away from), that will further alienate hulu in my book for good…

Jun 01, 2013 12:06pm EDT  --  Report as abuse
stuttgart100 wrote:
YAHOO buys this company and I will Cancel my subscription

Jun 01, 2013 8:44pm EDT  --  Report as abuse
$700 million from subscription and ad revenue. I guess a website that just stream repeats can be profitable.

Jun 02, 2013 6:11pm EDT  --  Report as abuse
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