Google in preliminary talks to buy Hulu | Hacker News Reader

Google in preliminary talks to buy Hulu

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91 pointstrustfundbaby32 comments

In Levy's "In the Plex", he writes about Google's original idea getting into video- They wanted to lay down with the content industry in much the same way that Hulu is now. Have all syndicated content, ads, the works.

They tried it with Google Video, and had a hard time signing the deals, and getting things done. Youtube was kicking their ass. So they bought Youtube, and it's continued to explode.

In their hearts, I have to believe that Google still wants to make that work. They've flirted with this a few times; Startrek/etc are on Youtube, and Google Video still has premium content.

Adding Hulu into the mix would give them the content/partner deals to run 1st-run, major studio content on their platform.

They could segment; Leave Youtube for viral/crowd/user videos, and Hulu for more "professional" videos.

Google Video, and Google.com would shows results from both when you video search.

It'd be brilliant.

Edit- Clarified wording.

The issue is: Whenever you do a buy like this, all the customers of the service get to jump ship if they want to.

So you don't necessarily get the network contracts by buying them.

Depends on what contracts they've signed, what their termination clauses are, and when they expire.

Most likely, the networks do have contracts such that they can jump ship at will.

I'm guessing it's not "at will" with no penalty but "in the event of ownership changes, non-payment, or with X noticed for the payment of Y liquidated damages', with Y being really large (and you can tell from the announcements that have come out of hulu the contracts have terms).

Channels Four and Five, two of the largest terrestrial TV channels here in the UK have been making their shows available through youtube for some time now. So in some territories it is working for them.

This would basically amount to Google paying for Hulu to be shut down. Who would buy Hulu? We know that its backers - NBCU (Comcast/GE), Fox (News Corp), and Disney/ABC - are not making as nearly as much money off of it as they want to. As a result, if they sell it off they are unlikely to support their content being on there even with the fees, since the fees Hulu is able to generate are not adequate.

The only reason I can see that Google would be interested in Hulu would be because it competes with Youtube. Because as soon as Hulu loses its media backers it appears doomed to go straight into the ground.

I dunno, I actually see this complementing and strengthening YouTube. Assuming Google can keep the content, it would make YouTube the place to go for both funny videos and network TV.

Google has been working for a while to get more "programming" on YouTube an this would be one hell of a way to accomplish that goal.

Way off base. Google is aiming to be a dominant player in the web TV space and compete directly with Comcast, Time Warner, etc.

They have had trouble securing content deals with the big networks. Hulu would be their Trojan Horse to get premium content onto the Google TV platform.

I'm not saying their strategy will work, or that the networks would approve them as a bidder, but they are clearly not aiming to run Hulu into the ground.

http://www.betabeat.com/2011/07/01/hulu-could-be-googles-tro...

The question is whether they would be able to hang onto the content, at a reasonable rate. Remember, Hulu is not a startup it is owned by the content distributors themselves. For sure Google will be charged more than the guys are charging themselves right now. And even now Hulu isn't making a very good ROI.

I'm not rooting against Google, if they can integrate it with their other offerings in a way that adds value, more power to them.

Seeing as how they are having troubles getting other content producers to sign up (Google Books and Google Music as examples) to Google media projects, the odds of them pushing through with TV and movie organizations seems even slimmer.

I don't think Google speaks "content", especially when they are or would be negotiating with organizations that have a strong interest in capping bandwidth or double dipping fees from organizations like Google. TimeWarner (and Comcast, even though you can't vote doesn't mean you can't lobby. . privately) I'm looking at you. I think the Google books lawsuit fiasco really damaged Google's reputation with the content creation community (and the AA organizations) which in turn would negatively impact their negotiations with content providers.

Also, Google can, and probably will be seen as an all out competitor to traditional business models. They're building GoogleTV to destroy set top boxes and push people away from traditional media access and onto the net and copyrighted material still floods youtube. From a negotiating perspective, Google would have to make an extremely sweet offer to content creators to get them to think about putting content on the mashup Hulutube / YouHulu site. (I personally think YouHulu sounds better).

This could very well be true, but there are a couple different things that could happen as well. Google has had a lot of experience in the past several years monetizing YouTube much more effectively, so it's possible they could do a better job than Hulu does now at generating revenues.

Alternatively (and I think perhaps most likely), Google simply sees mainstream TV being available on the Internet as of tremendous strategic importance. They might be willing to take significant losses in operating it for that reason. They might even be willing to pay the extra fees to bake it into Google TV, which would immediately make that product far more compelling.

Agreed, but I sure hope if this happens that they keep the two / three ads per episode model. I feel like that's pretty fair. We get to watch good TV online, they get to show us a few ads. But if they go all Youtube and start inserting flash overlay banners I'll jump ship.

I really liked Hulu when it was two or three ads per episode. Now I get two ads at a time, and a 30 minute episode of The Simpsons contains 4-5 ad breaks. It bothers me more than just watching it on TV.

Edit: The House episode I'm watching has 6 ad breaks, each of those have 1 or 2 ads.

I'm pretty sure the content guys want there to be more competition in the channel-delivery space... even with acquisition, I think Hulu will survive as it exists, if not get better.

You make a good point. However we do not know what is happening in the negotiations.

This is what I would do if I were Google. I would say to the media companies, that I need license deals for at least one or two more years in order to buy Hulu. The media companies would probably give those in order to be able to book a nice profit on Hulu. Then during those one or two years, I would work to cut the media companies out. I.e., I would make deals directly with producers to bring new TV shows to Hulu before they even get on TV.

Every year there are dozens or maybe even hundreds of shows that get pitched to the TV companies and most of them get rejected. I am sure there are plenty of good ones among them. Google has enough money to pick up some of those shows and to keep Hulu interesting.

Hulu is valuable not only because of their content deals (which are about to expire) but because it has trained millions of people to go there to watch TV. Google can take advantage of this and swoop in and cut out the middle man by making deals directly with the content producers. This is somewhat similar to what CD baby did for music.

Then after the shows run on Hulu they can be sold to networks to on television with the statistics behind each show that they are popular.

This is probably doubiely true because tv networks have much more limited air time, something that doesn't apply to hulu in he same way (and with almost certainly not apply to hulu running on google's equipment)

I think it would be a very good fit with them. But they need to make sure they won't get screwed by the networks later, when they won't care what happens to Hulu once they've sold it. Their incentive might be to kill it so they keep making money from normal advertising, rather than Hulu's online advertising.

But this is also an opportunity to strengthen their relationship with them, and get them to support Google TV.

EDIT: They can also do a lot of cool stuff to it, like integrating Google+ with it, for social viewing. Imagine Hangouts with Hulu...

WRT your edit: This reminds me of a service idea I had a while back which I shelved for far too many reasons: A site/chatroom-esque thing where you can invite people to watch things with you over the net (inspired by my long-distance relationship at the time). I'd originally thought of Megavideo, but youtube movies was even better (read: more legal). Advertising would have been fairly well-targeted, judging by the video these people were watching. Free idea, anyone?

The Colbert Report (via colbertnation.com) had/has something like this. It prompted me to try it when I was watching an episode, basically you wait for a room to fill up with people, then it plays to all of you while you chat. Obviously you can't pause, which bothered me as I am usually doing two things at once while watching something online

This actually is a feature of Google+. When in a "hangout" (the video chat service) anyone can push a youtube video to the group, which can then be watched by everybody together. Chat, audio and video continue underneath, so you can discuss what's going on.

> they need to make sure they won't get screwed by the networks later, when they won't care what happens to Hulu

EXACTLY. To make this work Google would need to tie an incentive scheme into the sales contract. Perhaps the combined momentum of TV over IP and an earn-out or overly-generous ad revenue deal would persuade the TV networks?

Alas, these same broadcasters still rely heavily on fees received from the cable operators (e.g. News Corp, et. al. threaten Time Warner Cable for higher fees before the Superbowl), but one can hope.

P.S. For some history on the Hulu IPO-turned-sale, this comment has some numbers/references: http://news.ycombinator.com/item?id=2685965

Remember Google Fiber for Communities when you read this. I would be very concerned if I was a cable company. Google would probably be happy enough to give a la carte TV via Hulu and high speed internet for little/no profit as another ad platform.

Assuming they can get the content. That's a big assumption to make just as the content companies are giving up on Hulu.

Don't most content deals have a clause that invalidates them in case the company gets sold? Don't the networks hate Google (see Google TV as an attempt to get their content on televisions for free)? Doesn't Google already own a video streaming company?

"Two of the media companies behind the online video service, Walt Disney Co. and News Corp., recently renewed licensing agreements to make Hulu more attractive for a sale." Providing the other networks will follow suite this looks to be a great opportunity, though I do wonder how it will play in with their services

They already have the three major networks. NBC/Universal (Comcast) is obligated to provide the same thing as the other partners due to the Justice Dept's rules regarding the takeover.

http://techcrunch.com/2011/01/18/comcast-nbc-merger-the-hulu...

I guess the could transition Hulu into a pure subscription platform and use youtube as the ad supported platform. Move premium Youtube content over to Hulu and integrate search so Hulu results show in Google.

I assume that if this is true, this would be evidence of them putting a lot of money on the "re-launch" of Google TV.

Google TV was a bomb for me when the cool unified streaming TV search feature didn't actually work in reality, because Hulu blocked it.

Buying them out and integrating it is one way to solve that problem.

Well, it's certainly not for their crap content or the ads Hulu shows despite being a paid service.

Do they have enough customers to matter anymore? It's not like the goodwill of media companies is worth anything.

Lots of people still use it, are you sure adoption is going down?

Hulu+ is pretty popular in my circles.

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