AT&T has sold its 9.5% stake in Hulu, acquired through its Time Warner deal, back to Hulu for $1.43 billion.. The transaction valued Hulu at $15 billion.The fact that it was sold to Hulu, and not Disney (which had negotiated for months to acquire it), is significant.
When Disney beat out Comcast for Fox’ entertainment assets, thereby adding 30% to the 30% stake in Hulu it already owned, many assumed that Comcast would sell out. It had mixed feelings about the economics behind streaming content, and lack of control over an increasingly expensive proposition. Hulu lost $1.5 billion last year, according to a Comcast 10K.
But earlier this year NBCU CEO Steve Burke said his company wasn’t planning to exit Hulu anytime soon.
Disney sees Hulu as one cornerstone of its planned streaming service, Disney Plus. Comcast, which is also planning its own streaming entry, probably sees Hulu as a platform for its own content, and also as an experiment it needs to be part of. If streaming is the future, its an existential threat to Cable’s existing business model.
But we’ll see how the crowded streaming market gets, and how it holds up.
One question that remains to be answered is whether Cable’s Docsis model will be needed in the future, or will become irrelevant and replaced by IP delivery.
