In recent months, there have been numerous rumors that companies like Yahoo, DirecTV, and AT&T were interested in buying video-streaming service Hulu, which is currently owned by the unholy trinity of FOX, NBC, and Disney. But today, the trio of owners confirmed they are staying put and will actually pump some more of their own money into the business.
In a joint announcement, FOX, NBC, and Disney stated they will provide a cash infusion totaling $750 million “in order to propel future growth.”
“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,” said Robert A. Iger, Chairman and CEO, The Walt Disney Company.
With the recent launch of a live-streaming service for ABC, some had speculated that Disney was getting out of the Hulu business. One of the service’s original investors, Providence Equity Partners, sold its 10% stake in the company for $200 million last October. NBC, while still an owner of Hulu, has seen its power with the company lessen in the wake of the NBC/Comcast merger, with Disney and FOX holding the majority of seats on the board.
And it looks like there was truth to the rumors of a possible sale.
“We had meaningful conversations with a number of potential partners and buyers, each with impressive plans and offers to match,” said Chase Carey, President and COO of 21st Century Fox in a statement, “but with 21st Century Fox and Disney fully aligned in our collective vision and goals for the business, we decided to continue to empower the Hulu team, in this fashion, to continue the incredible momentum they’ve built over the last few years.”
Given that everyone and their uncles seem to be trying their hand at making money on streaming video these days, to us this cash infusion reads like the owners saying they will give Hulu one more shot at becoming the market leader.
What is most intriguing is the lack of information about where that $750 million will be spent. Major advertisers still seem skittish about investing huge amounts of money in streaming video ads — mostly because such ads make many consumers want to smash the screen with a sledgehammer — so our guess would be that Hulu will use the money to bolster content and visibility of its Hulu Plus subscription service, as that brings in both ad revenue and monthly fees from users.