Hulu looking to launch IPO
Online video site Hulu, which has emerged as one of the most popular places to watch television shows on the Internet, wants to see whether Wall Street will embrace it as much as the public has.
The company -- owned by media giants News Corp., NBC Universal and Walt Disney Co. and private equity firm Providence Equity Partners -- is in talks with investment banks about launching an initial public offering as early as this fall. The news was first reported by the New York Times.
Such a move would provide a fresh infusion of cash for Hulu, without requiring it to seek an additional handout from its corporate parents. The media giants plan to retain their stake in the service, but Providence, which has a 10% stake, may be looking to cash out.
Providence did not return a call seeking comment. A Hulu spokesman declined to comment.
Although Google Inc.'s YouTube continues to dominate Internet video in terms of audience size and time spent watching, Hulu has become the go-to place watch TV shows online.
Despite its success with users, Hulu is not yet throwing off gobs of cash. It reported that it brought in more than $100 million in revenue in 2009 and expected to surpass that milestone this summer. A stock offering would generate more revenue to build its new $9.99-a-month subscription service, Hulu Plus, and compete with rival offerings from Netflix Inc. and Amazon.com Inc. The movie subscription service Netflix acknowledges that Hulu has been aggressively adding more television shows to strengthen its offering.
Questions have been raised about the long-term commitments of some of Hulu's owners. NBC Universal is in the process of being acquired by cable giant Comcast Corp., which has its own online TV service, Xfinity. Xfinity's offerings include "True Blood" and "Weeds," and requires users to prove they're cable subscribers before they can watch shows.
Media companies are also trying to strike a balance between offering content on multiple platforms and protecting their own bottom lines. There are concerns that Hulu could cannibalize the television audience. Programmers also have to be sensitive to the needs of the cable and satellite distributors that pay for access to the programmers' content.
-- Dawn C. Chmielewski
Image: Hulu video player. Credit: Hulu