Hulu’s owners canceled a four- month auction of the online video service. News Corp., Walt Disney Co., NBC Universal and Providence Equity Partners have had key differences over how to proceed with the service, and now will have to decide whether some new consensus is possible. Hulu decides not to sell
Some might speculate that a combination of issues are at work. Buyers apparently did not think the asked-for price was reasonable. And Netflix might appear to be more vulnerable at the moment as well.
Online video represents only a small piece of the total advertising pie, but the growth in streaming ad revenue is becoming more of a threat to the broadcast medium that supplies most of the high CPM content. In the past, some of Hulu’s broadcaster backers have heard from media buyers that the video site’s ad sales often offer discounts on ad sales that are not available on the broadcast networks. Hulu Tensions
NBC Universal, News Corp. and Walt Disney Co. were in early 2011 increasingly at odds over Hulu’s business model. Worried that free Web versions of their biggest TV shows are eating into their traditional business, the owners disagree among themselves, and with Hulu management, on how much of their content should be free.
Fox Broadcasting owner News Corp. and ABC owner Disney were said to be contemplating pulling some free content from Hulu, as a result. The media companies are also moving to sell more programs to Hulu competitors that deliver television over the Internet, including Netflix Inc., Microsoft Corp. and Apple Inc. Tensions over “free” content.
Tensions in the video ecosystem are growing, and not just because some consumers are cutting the cord, or simply refusing to buy the product. Suppliers are not of one mind about how to embrace online delivery, either.
