NEW YORK ( TheStreet) -- It was recently made public that the most likely candidate to walk away with the rights to Hulu, the popular video streaming site, would be DirecTV ( DTV).
The deal is reportedly worth a little bit more than $1 billion and will be split between Disney ( DIS), Comcast ( CMCSA) and News Corp. ( NWS), the three joint owners of the site. The estimated $1 billion is a steep dive from what the owners were looking to get a year ago. In fact, it's about 50% less to be exact. However at the time, the terms included exclusive long-term rights to the content (from ABC, FOX and NBC). Now it does not. So it is possible that the content owners could double dip on the deal, first with the initial sale and then with content licensing. You could argue that both parties walked away with a win. DirecTV needed something to boost their simple business model of rooftop satellite dishes and the owners were able to unload Hulu for a cool one billion bucks. But the question isn't who the biggest winner in all of this is, but rather, who isn't. Yahoo! ( YHOO) was reportedly looking to spend $600 million to $800 million on a deal to acquire Hulu. While the deal (which is unofficial) fetched a couple hundred million more than Yahoo! was looking to spend, should it have chased the price a bit higher? Last month, CEO Marissa Mayer made headlines when she went out and picked picked up Tumblr for $1.1 billion. Since the move was made in an effort to increase traffic -- specifically, from young adults -- wouldn't it seem prudent to spend a similar amount in a bid for Hulu? I mean, it has more than 4 million paying subscribers, which is double that of a year ago and helped generate almost $700 million in the last last year alone.
Even without the revenue figures, the company had more than 24 billion minutes viewed in the month of May and users watched more than 1 billion videos last quarter. With the average session lasting 45 minutes, it certainly has the engagement of its users, which is exactly what Yahoo! is looking for.