Hulu Nixes IPO Plans
The online video site may look to its existing investors to raise capital, now that it's dismissed plans for a public stock offering, say reports.
Hulu, the popular movie and TV show streaming site, is not planning to go public in the near future, the Wall Street Journal reported Tuesday.
Hulu is instead pursuing new subscription plans beyond its recently launched paid service, Hulu Plus. One reason Hulu's management decided not to proceed with an initial public offering (IPO) was the company does not have long-term rights to its owners' online video programming, according to the Journal.
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An IPO was being considered by Hulu's management to raise funds so it could license additional content from a broader range of media companies, the newspaper reported. But the company has decided to instead pursue other options to raise capital rather than go public. One option might include Hulu's owners infusing the company with more money, the Journal said.
Hulu's investors include News Corp., Walt Disney, NBC Universal, which is owned by General Electric, and Providence Equity Partners.
Citing "people familiar with the matter," Hulu CEO Jason Kilar and senior board members discussed the possibility of offering new subscriptions during a meeting last week, the Wall Street Journal reported. Hulu is looking to secure rights to distribute content it doesn't already have with the new subscription plans, the newspaper said. It was not made clear whether the new subscription plans would affect Hulu Plus.
Last week's talks were at "an early stage" so no details were given about what type of TV programming or movies the new plans would include -- or whether the discussions would continue, the Journal said.
Hulu's rivals, which include Netflix and Google's YouTube, are also expanding their online programming to include access to TV shows. Hulu started by offering free recent episodes of current TV shows and has been expanding its lineup to include full seasons of shows as well as older content. Its business model is largely advertising based, but its owners have been looking to generate more revenue with subscription-based services, the Journal reported.
Hulu Plus was launched last summer and offers full seasons of certain shows that previously had been limited to some episodes. Subscribers can also watch on portable devices such as tablets and Internet-connected TVs. The monthly cost was dropped from $9.99 to $7.99 after customers complained the selections on Hulu Plus were limited.
In related news, Hulu Plus is slated to soon be offered by TiVo's Premiere DVR service, but it will not be available from cable companies, including RCN, Cox, and Suddenlink, that lease the digital video recorders. Both Hulu and Netflix said the cable companies' contracts don't allow them to offer the subscription services, according to Gigaom.com.
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