Hulu Reports Strong Q2; Disney Executives Confirm Sale

Hulu Reports Strong Q2; Disney Executives Confirm Sale

Earlier this week, Hulu CEO Jason Kilar posted a blog entry on the joint venture's second quarter. Overall results were good, with Hulu Plus ramping significantly more quickly than anticipated. Kilar notes that Hulu Plus, the website's paid subscription service, "added more paying subscribers in June than we did in April and May combined." The site now expects to break the one million subscriber mark by the end of the summer as opposed to by the end of the year. These figures do not count anyone testing the one week free subscriber trial.

According to Kilar, content owners currently earn approximately eight dollars per subscriber per month. He writes "A portion of the $8 payment to the content community comes from our $7.99 subscription fee; the balance comes from the revenue we generate through advertising." More Hulu Plus subscribers means more revenue for content owners, but the terms used her are vague. Both types of Hulu users view ads, but only a tiny fraction of Hulu viewers subscribe to Hulu Plus. As such, the implication that is disingenuous

The post also highlights Hulu's recent growth as measured in other ways, from the total amount of content available through the service to the size of its advertising market. The entire missive is clearly intended as a bit of advertising, which makes sense given that the service is up for sale. Disney's Chief Executive Bob Iger has stated that the site's joint owners (NBCUniversal, News Corp, and Disney-ABC) are focused on getting top dollar. "I don't think it matters to us, we just need to get the best value," Iger told Reuters on the sidelines of the Allen & Co conference."


Hulu subscriber levels, Nov 2010 - June 2011

Google and Microsoft are both named as potential buyers out of a dozen or so interested parties. A Google acquisition is likely problematic. Hulu is a natural fit for GoogleTV but acquiring the company would give the search giant even more control over video advertising (and online advertising in general) than it already possesses. Regulators are already eyeing Google warily; purchasing Hulu might well be a bridge too far.

Microsoft could make its own play here, and may have good reason to do so. Despite the company's best efforts, Bing remains in third place with 14.1 percent of the market according to comScore or second place (30 percent) if you count Yahoo searches, which are Bing-powered. Either way, Microsoft could conceivably leverage Hulu to offer specialized video searches / preview options that would point directly at site content.

Hulu's focus on providing content across a huge range devices increases the chance that we'll see company's that don't normally fit the definition of a 'content provider' take an interest in the website. Hopefully whoever buys it will retain the usage model that's helped the site reach its present level of success. Quick attempts to cash in by stuffing the site full of (more) advertising or altering subscription plans could kill the site's attractiveness in short order.
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Well I don't think that Google or Microsoft would be good suitors but I'm hoping that the somebody who buys it will put good care into Hulu.

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I find some good streams of subbed anime on there that I was unable to find on other sites. Hulu is great at content and I don't mind the two short commercials at all. Just like Taylor I think whoever acquires Hulu just needs to mainain the current site and listen to us the consumers.

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I second that definitely TalorKarras. I use HULU daily to watch something, As far as what LBowen say's on the commercials I don't mind them really, as the amount of commercials they air are well less than what is on TV for sure. It is all quite funny really as at my house we watch TV a very small amount. The main use of Television in my house which is still minimal anyway is done by my 4 year old. She watches several Kid only channels (PBS, Nick Junior etc), we (the 2 adults in the house) watch a very minimal amount of TV, which is generally done at dinner time, and sometimes (depending on the time of year) watch some other shows like Dexter or Game of Thrones, and of course Survivor, Big Brother, and the Amazing race which is basically the only 5 TV shows we watch minus the History channel and a few other specialized ones randomly.

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