In the media: Hulu backs off IPO, ponders more paid services
Tue, 12/21/2010 - 7:25am
Over-the-top video service provider Hulu is putting its plan to go public on the backburner for now and may instead focus on adding new subscription models to boost its revenue stream.
While rumors of an initial public offering (IPO) by Hulu have been making the rounds for sometime, yesterday The Wall Street Journal reported that the company was looking at other ways of raising capital, which could also include the existing investors putting more money into the company.
The IPO could have raised as much as $200 million to $300 million, and the additional funds could have been used to gain access to more content. Under that scenario, the IPO would have valued Hulu at more than $2 billion.
Hulu was founded in 2007 with General Electric's NBC Universal and News Corp.'s Fox as its initial co-founders. Walt Disney and Providence Equity Partners are also part of the Hulu joint venture, and Comcast could join their ranks once its merger with NBC Universal is completed.
According to the WSJ, Hulu CEO Jason Kilar and board members talked about new subscription-based services last week.
Hulu relied on advertising-based revenues in the beginning but started offering Hulu Plus for $7.99 last month after a limited, invitation-only trial for $9.99 in the summer.
Hulu has faced increased competition from OTT rivals such as Netflix, Amazon, Google and Apple, as well as streaming services from traditional video providers such as Comcast and Verizon that were designed for their subscribers.