DIRECTV Considering Hulu Purchase

Hulu, an online streaming site bringing video clips and full television shows to web viewers, is gaining traction in the marketplace, such that larger cable and satellite TV providers are considering purchasing the six-year-old service. DIRECTV, the number one satellite TV provider in the United States, is the latest to show interest. Hulu’s owners, which include Walt Disney, News Corp, and Comcast, are considering a sale, as well as other partnership opportunities. Time Warner Cable is another company in the same sphere that has expressed interest in purchasing Hulu.

More from the Wall Street Journal:

People familiar with the matter say pay TV operators like DirecTV could be interested in the site in part to expand their so-called “TV Everywhere” services, which make TV shows available over the Web to pay TV customers. TV networks and distributors offer a range of such services, but industry executives acknowledge that many consumers aren’t aware of the services or how to access them.

Pay TV distributors face a maturing U.S. pay TV market with slowing subscriber growth. Some industry executives have expressed concerns about the potential for “cord cutting,” or users choosing to drop pay TV connections in favor of affordable online video services. Cable companies are relatively well-positioned for such a change, since they sell broadband subscriptions. Satellite operators DirecTV and rival Dish Network Corp. DISH +0.46% are more reliant on their video business.

It is unclear if DirecTV is interested in buying a minority stake in Hulu or all of the site, the person familiar with the matter said. The talks between the companies could fall through. DirecTV was among the buyers who had kicked the tires on the online video site the last time it put itself up for sale in 2011.

Launched in 2007, Hulu was meant to be the broadcast networks’ response to the growing popularity of online video delivered on sites like Google Inc.’s GOOG +0.26% YouTube. But Hulu, which offers both free, ad-supported TV shows from NBC, ABC and Fox, and a subscription option, has struggled to keep pace with faster-growing rivals.

Netflix had roughly 28 million paid streaming subscribers in the U.S. at the end of March, while Hulu had about four million subscribers to its subscription service for the quarter ended March 31.

We’ll keep an eye on this story here at the TV, Internet and Phone Blog.

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