DirecTV (DTV), the largest U.S. satellite TV provider, is interested in acquiring at least a stake in online-video site Hulu LLC, according to two people with knowledge of the situation.
Discussions are at an early stage and it’s uncertain if the company would want to buy all of Hulu or just a portion, said the people, who asked not to be identified because negotiations are private. Walt Disney Co., News Corp. (NWSA) and Comcast Corp. (CMCSA) each own about one-third of Hulu.
The move signals that DirecTV is willing to take another look at a company that it considered acquiring in 2011. The satellite provider decided not to do a deal at the time because the online website’s content rights were limited, DirecTV Chief Executive Officer Mike White said in an interview last month. Time Warner Cable Inc. (TWC), the second-largest U.S. cable operator, is also considering taking an equity stake, according to people with knowledge of the matter.
“On the heels of Time Warner Cable’s potential interest, it appears the distributors are taking an ‘if you can’t beat me, join me’ strategy toward online companies,” Paul Sweeney, an analyst at Bloomberg Industries, said in an e-mail. “It’s an interesting change of heart.”
DirecTV rose 0.8 percent to $65.21 yesterday in New York. The shares have gained 30 percent this year.
Hulu would give DirecTV an additional Internet-based video platform to supplement its market-leading satellite-TV business. DirecTV offers some of its video content live and on-demand through its so-called TV Everywhere platform.
The streaming service is seeking to double its number of advertisers this year as it targets local businesses, Jean-Paul Colaco, Hulu’s senior vice president of advertising, said earlier this month.
Hulu’s board reached out to potential strategic buyers, people with knowledge of the situation said in March. Its controlling owners, Burbank, California-based Disney and New York-based News Corp., disagree on Hulu’s future direction and have discussed one partner buying out the other’s stake, the people said at the time.
Former News Corp. Chief Operating Officer Peter Chernin, who helped found Hulu, offered at least $500 million, people with knowledge of the situation said last month. Yahoo! Inc. CEO Marissa Mayer met with senior executives of the Los Angeles-based online-television service, people said this month.
To contact the reporter on this story: Alex Sherman in New York at email@example.com
To contact the editor responsible for this story: Nick Turner at firstname.lastname@example.org