The Wall Street Journal has reported that Hulu has pulled its rumored plans for an initial public offering in 2011 due to its lack of long-term distribution rights for content from its three broadcast TV network owners. Its deals with ABC, FOX and NBC are its main asset, but all-exclusive distribution deals in place are soon coming to a close. According to The Journal, the company will begin seeking alternative options for raising more capital.
Hulu’s problems with the funding could spread to others and also highlight the strengths of its competitors. Hulu is getting put in a tight spot as the pay-TV companies roll out TV everywhere offerings and begin seeking exclusive deals for digital distribution through Web sites and apps. At the same time, Netflix is securing more and more content, including new and current programming, and is starting to eclipse what Hulu offers.
Add that in to a recent study that found 88% of Hulu Plus subscribers are also Netflix subscribers, and it looks bad for Hulu if it can’t raise enough capital to support its service and secure exclusive content deals. There’s also the YouTube rumor of a coming streaming service for 2011, which will likely be either very cheap or free.
It could be a tough 2011 for Hulu, so expect some shakeup and future offerings to sweeten up the Hulu Plus subscription, perhaps with more tiers and prices.
Why not sell it to Netflix and be done with it, then it would be successful.