Hulu LLC has lost a potential bidder in Microsoft Corp. (MSFT) but Yahoo has showed interest in bidding for the Web TV. Microsoft confirmed its exclusion from the second round bidding process but it didn’t rule out any possibility to re enter for the bidding. Microsoft executives did even meet with the bankers of Hulu based at Guggenheim Partners and Morgan Stanley (MS) in a span of a month.
Microsoft is already well set in this field to as it allows selling and renting of TV shows and films which is via again its popular gaming console Xbox. Bankers claimed to meet AT&T Inc. (T), Yahoo Inc., Google Inc. (GOOG) and even 8 more companies. The spokesperson of Hulu and Microsoft, Elisa Schreiber and Frank Shaw respectively declined to make any comment.
Business Insider reported that Hulu would be paid for the access of not only older movies and TV shows currently. This would be for a span of 4-5 years and Yahoo would pay 2 million USD approximately for the access. The Web TV plans to offer the accessibility of various shows which include Comcast Corp. (CMCSA)’s NBC Universal, News Corp. (NWSA) and Walt Disney Co. (DIS). Detailing the rights terms, which is quite similar to that offered by the owners of Hulu. However talking about the exclusive portion, the span would be only for two years. The financial data and share sale would be given only to bidders as they would be signing an agreement which would not be disclosed.
There are claims made that Hulu has no great worth if it does not offer exclusive streaming rights for 4-5 years at least. Agreed that Hulu has “nice technology,” but the fact that the rights are exclusive. This might just force Yahoo to come up with a bid which is competitive in the current scenario. If the span is increased, it would give some real time to the new owners to make a mark and to build on this new expansion. Premium advertising and premium content might even be just on the way then. For the time being, one can surely say that the valuation summed up by Yahoo looks highly irrelevant and building on this basis might hurt Yahoo.
On the contrary, Bob Iger, CEO of Disney has been sending more time trying to pitch in Microsoft and Google for the deal. This was reported by a source who was at the Allen & Company’s recent retreat. It was said that may it be Amazon, Microsoft or Google, there could be much bigger and better options coming from the deal as compared to the Yahoo bid.
Why Google but? The reason being that Google not only has the richness to throw a bigger deal, but also that the search engine has shown interests in brand ads selling for any content in the video format and has a premium. There are plans already for YouTube that Google would spend around a hundred million to produce premium content. But getting Google would be difficult as there are problems like anti-trust issues which will majorly restrict Google to get into the bidding.
Talking about the Seattle based Amazon.com Inc. (AMZN), it has notified that without any guarantee on the shows which will be accessible, they would not participate in the bidding process. It however depends on the term even. If tomorrow Hulu renews the rights for the exclusive portion for up to four years, then the valuation can formidably priced anywhere between 1 and 2 billion USD or even higher.