NEW YORK (TheStreet) -- Hulu may be considering a sale of the company, but who would be interested in making a bid?
According to reports, Hulu, which is known for its free access to streaming television shows, was approached by a bidder. The Los Angeles Times has identified Yahoo! (YHOO) as the possible acquirer.
But there has been no indication as to whether Hulu's owners, which include News Corp. (NWSA), Walt Disney (DIS), Comcast's (CMCSA) NBC Universal and private-equity firm Providence Equity Partners, are open to a sale.
According to the reports, the acquisition approach wasn't made by any of these equity holders. The buyer is expected to be either a strategic player or private equity.Selling off the company could represent a good opportunity for Hulu, which has been struggling to define its strategy. "Hulu needs to change its ownership structure," said Janney Capital Markets analyst Tony Wible. "There are too many conflicts with its current owners. To the extent it is sold to a company with deeper financial resources it could be a bigger threat to other players like Netflix (NFLX), especially if they can run the business without the current conflicts." One such conflict is that some of these content owners have started making some of their content available on other services, including Netflix, which has upset the other owners. "As such, the disparate corporate interests again have made a joint-venture difficult to sustain," Miller Tabak analyst David Joyce wrote in a note. There are also some content providers, most notably CBS (CBS), that have refused to offer their programs on the free site. "Depending on the ultimate ownership of Hulu and the subsequent content access deals it will strike over time, there may be an opportunity to forge better partnerships with the core TV content and broadband/distribution companies, and take some subscriber market share from Netflix," Joyce wrote. Last year, Hulu spent nearly six months prepping for an initial public offering to raise between $200 million and $300 million, but decided to forgo the plan. Instead, Hulu chose to turn its attention to introducing a new subscription model to compete with Netflix. The company launched Hulu Plus, which was originally priced at $9.99 a month, but later lowered it to $7.99 to remain in competition with Netflix's pricing model. In April, Hulu's CEO Jason Kilar, said that the company is on track to nearly double its revenue to $500 million and reach 1 million paid subscribers by the end of the year. In comparison, Netflix now has more than 20 million U.S. paid subscribers. "While financial buyers could be likely, we would expect potential future strategics to take a hard look at the asset," Joyce wrote. Read on for a look at companies that might be interested in purchasing Hulu.
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