According to BI, Yahoo would be willing to purchase on-demand streaming TV service Hulu for $2 billion, as long as certain demands are met.
Hulu is owned by Disney (ABC), News Corp. (Fox), Comcast (NBCU) and private equity firm Providence.
Yahoo is only willing to make the deal if Hulu guarantees them 4-5 years of exclusive access to the media content.
Hulu, on the other hand, seems to be only willing to give 2 years of exclusivity, albeit with 5 years guaranteed access to the content.
Says one source:
If Hulu does offer 5 year exclusivity, Yahoo would have enough time to "build enough equity with consumers that you've created a real leader in premium content and premium advertising," adds the source.
Without exclusivity, Yahoo (and other bidders) could simply just bid for the rights to stream the content in the future, as it would cost significantly less. In fact, when the exclusivity period for Hulu's current content ends, Google and Amazon are expected to bid hundreds of millions of dollars for the rights.
Yahoo is only willing to make the deal if Hulu guarantees them 4-5 years of exclusive access to the media content.
Hulu, on the other hand, seems to be only willing to give 2 years of exclusivity, albeit with 5 years guaranteed access to the content.
Says one source:
If [Hulu's content creating owners] came out and said, we've renewed [Hulu's exclusive rights] for four years at the same terms we have today – it's really easy to model [a valuation between] $1 billion and $2 billion – maybe more.
Without four or five years of exclusive streaming rights to TV shows and movies, Hulu is not worth anything.
If Hulu does offer 5 year exclusivity, Yahoo would have enough time to "build enough equity with consumers that you've created a real leader in premium content and premium advertising," adds the source.
Without exclusivity, Yahoo (and other bidders) could simply just bid for the rights to stream the content in the future, as it would cost significantly less. In fact, when the exclusivity period for Hulu's current content ends, Google and Amazon are expected to bid hundreds of millions of dollars for the rights.
