One Wall Street analyst is arguing that it would be a "mistake of epic proportions" for News Corp., The Walt Disney Co. and NBCUniversal parent Comcast to sell Hulu, reports the Los Angeles Times’ Company Town blog.
"Media companies should be going out of their way to retain ownership of Hulu and allow it to flourish," wrote Richard Greenfield, a media analyst with BTIG. "The bigger Hulu gets, the more dollars it can pay content creators on an annual basis."
Hulu has attracted interest from companies including Amazon.com, DirecTV, Google and Yahoo, who are expected to submit bids as high as $2 billion for the service, the story says. Initial bids were expected to come in today.
Hulu has been gaining momentum and is on pace to hit $500 million in revenue this year, Greenfield notes.
The Times story reports: “Hulu’s media owners have long struggled with the service’s success, which some see as threatening established business relationships with cable, satellite and telecommunications companies. These distributors have balked at paying for popular prime-time shows that Hulu has made available online for free a scant 24 hours after an episode’s initial airing.”
But Greenfield noted that the trend toward “authentication” — allowing only cable and satellite subscribers to gain immediate online access to current shows — "solves that problem for very recent content."