AT&T and Chernin Group Considering Joint Acquisition of Hulu
Since its launch in 2007, the video-streaming service Hulu has slowly grown into one of the web’s most popular destinations. Owned jointly between News Corp, Disney, and Comcast (which own Fox, ABC, and NBC, respectively), Hulu has become a pretty important part of many people’s content-watching routines, as most new television shows are hosted on the site the day after they’ve aired. Considering its value, it’s no surprise that telecom giant AT&T is considering a joint acquisition of Hulu with the Chernin Group.
A post on AllThingsD today cites “sources close to the telecommunications giant,” who say that AT&T is in talks with the Chernin Group regarding a potential bid on Hulu, which has been put up for auction by its aforementioned owners. According to the post, the investment firm’s COO, Peter Cherenin, “was integral to the founding of Hulu and had intimate knowledge of how it operates.” Apparently the Chernin Group on its own has already bid an amount around $500 million, but that it’s likely to try again with a higher bid. And if Chernin teams up with AT&T, there’s certainly potential that the bid could go very high, indeed.
If these reports are true, and AT&T manages to actually buy Hulu, it could be a major coup in the war for subscribers. For years, AT&T’s claim to fame was its exclusivity in offering Apple’s iPhone, which—love it or hate it—has been in a class all its own in the world of smartphones. But spotty service during its exclusive period, and the iPhone now being available from plenty of other service providers, has left plenty of consumers somewhat soured on AT&T as a company. Adding Hulu to its portfolio has the potential to lure them back by offering low or no-cost subscription packages.
As it stands, Hulu Plus provides more content than the free, nonplus version, all for a $7.99 monthly subscription fee. Imagine, then, that AT&T grabs Hulu and starts offering free yearly subscriptions to Hulu Plus with new or upgraded mobile contracts. That could mean tons of fresh TV content on tablets and phones on AT&T service plans, which could be enough to make AT&T one of the more desirable service providers again.
The post also notes that other TV-providers are sniffing around Hulu for a potential purchase, including DirecTV and Time Warner Cable. Given that, it seems that these companies understand the value that Hulu has in attracting consumers looking to get their TV fixes in non-traditional ways. Additionally, the post also says that Yahoo is one of the contenders for the site, and we’d heard rumors of a $600 million to $800 million bid only a few weeks ago. Considering that Yahoo’s been in a mood to gobble up everything it can that’ll help bring it back into contention with search giant Google, I’d say it’s anyone’s race at this point.
As Netflix and iTunes have proven, on-demand content is the future of programming, and any edge in that regard is a big bonus. The big question is this: just how much higher will the bidding go before we have a winner?