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Why Hulu's backers won't sell it to just anyone

Hulu, the online network television portal that many Los Angeles residents use to watch programs like "Modern Family" and "The Voice," was on the market until very recently.

But now, for the second time in two years, Hulu has been yanked out of the hands of potential purchasers. Why?

The answer is complex and speaks volumes about the complicated state of the 21st century media landscape.

Disney, 21st Century Fox and NBC Universal started Hulu several years ago as a way to combat the growth of subscription TV, like HBO and Showtime. The thought was that giving consumers easier access to programming, the networks would be able to keep audiences from straying.

Hulu has performed well since it was launched, earning many loyal users and actually bringing in revenue, which is not always the case with enterprises that are as young as Hulu is.

The three companies that owned Hulu want to sell it, but so far, the only interested parties have been companies like Netflix and Time Warner Cable -- the very pay-for-content companies that Hulu was designed to combat in the first place. That explains why the offer to sell Hulu was withdrawn over the weekend, even though some would-be suitors were prepared to pay as much as $1 billion for Hulu.

We took note of this story because we are an entertainment law firm and we think it is important to stay abreast of important industry developments. If this story has any interesting twists or turns in the future, we will definitely consider a follow-up post.

 

Source: The Verge, "Hulu pulls plug on sale after months of bidding, owners invest $750 million in company," Adi Robertson, July 12, 2013