By all accounts, Hulu is a pretty decent service. It sucks that you have to watch ads even with a Hulu Plus subscription, but it’s oftentimes the only place to watch the latest TV shows whenever you want. It’s the kind of service that companies would want to own, but its current owners aren’t letting go just yet.
Disney, 21st Century Fox and NBCUniversal announced today that they are taking Hulu off the market. The three had been previously searching for a buyer to take the service off of their hands, but they ultimately decided it was in their best interest to retain ownership. As part of this decision, the three owners have also agreed to pump $750 million into Hulu.
“We believe the best path forward for Hulu is a meaningful recapitalization that will further accelerate its growth under the current ownership structure,” said Chase Carey, President and Chief Operating Officer of 21st Century Fox. “We had meaningful conversations with a number of potential partners and buyers, each with impressive plans and offers to match, but with 21st Century Fox and Disney fully aligned in our collective vision and goals for the business, we decided to continue to empower the Hulu team, in this fashion, to continue the incredible momentum they’ve built over the last few years.”
We know Hulu’s owners are keeping it, but why did they suddenly decide to take it off the market? One potential reason could be that Hulu is doing pretty well for itself these days. The company’s latest quarterly report showed that it has over 4 million paying Hulu Plus subscribers on top of its millions of free users that watched over 1 billion videos in only three months. Those billion videos translates to a lot of ads and a lot of ad dollars.
Hulu CEO Andy Forsell said just as much in the company’s quarterly report:
“According to comScore, Hulu is #1 in engagement among top ad supported sites. Hulu viewers stay with us for 45 minutes per session—without fast-forwarding or skipping ads. Hulu is also #1 in market share of all premium online video providers, delivering 1 in 3 of all premium video ads in the U.S. Our reasonable ad load drives the highest recall and awareness for brands, which results in higher effectiveness for the video ads.”
With this latest round of cash, I wouldn’t be surprised to see Hulu investing in even more original content. It already has a number of original series from the BBC and SNL alums, and it also recently revived All My Children and One Life to Live.
All of the above proves that there’s plenty of potential left in Hulu. It’s owners just have to let that potential flourish.