The online video site
But under its new management, the site will throw off its old mantle of TV disrupter as it seeks to work in partnership with cable and satellite companies.
"When you hire a guy who's spent his life in distribution, it probably signals that they're looking for a second revenue stream in that area," Needham & Co. media analyst Laura Martin said.
Such a move would preserve existing business relationships between pay-TV operators and Hulu's owners —
The newly installed Hulu executive team is believed to already be pursuing deals with cable operators to offer subscribers access to Hulu as a way to watch current shows online, according to several people with knowledge of the situation.
The team also may seek to use these same pay-TV providers to sell subscriptions to Hulu Plus, which extends TV viewing to Internet-connected game consoles and televisions as well as to smartphones and tablets.
The play-nice-with-the-cable-guys strategy marks a shift in emphasis for Hulu, a site that launched in March 2008 with big ambitions to change the TV world by providing free online access to popular TV shows.
The service, which won praise for its ease of use, caught on quickly with users. Within a year, Hulu ranked second only to
Hulu succeeded a little too well for the cable and satellite companies that pay for the right to carry TV programming, and viewed Hulu as a threat.
Suddenly, entire seasons of such popular cable network shows as
The future of Hulu came into question when
"History has shown that incumbents tend to fight trends that challenge established ways and, in the process, lose focus on what matters most: customers," Kilar wrote. "Hulu is not burdened by that legacy."
That appraisal proved inaccurate.
The site's media owners — which compete for TV ratings — found it hard to work as partners on the venture, and elected to put their problem child up for sale.
When owners 21st Century Fox Inc., Walt Disney Co. and Comcast Corp. abruptly canceled a proposed Hulu sale last July, and announced they would instead invest $750 million into the streaming service, no one was more surprised than the bidders.
Hulu attracted interest from pay-TV distributors
Even as the parties worked through the Fourth of July holiday to prepare final bids, with offers of $1 billion to $1.2 billion, Hulu's owners developed a case of cold feet, several people familiar with the matter said.
Hulu's third owner, Comcast, cannot influence or interfere with the site's operation under terms of a federal consent decree related to its acquisition of NBCUniversal. However, the nation's largest cable company made clear its objections to a potential sale to its chief competitor, DirecTV, a person with knowledge of the matter said.
Comcast also signaled that it would be willing to invest in Hulu's growth if Disney and Fox chose to retain ownership.
Comcast did not respond to a request for comment.
At the time the sale was canceled, Hulu's corporate parents said that the avid interest from traditional pay-TV distributors and digital media companies underscored the site's value. It would be foolish to give away such a gem, they said, for some other company to exploit.
"Any buyer would have wanted to disrupt the traditional TV business and really rock the boat," said Mike Vorhaus, head of the digital media practice at Frank N. Magid Associates. "Keeping Hulu ownership with the current owners is less threatening."
As Hulu looks to the future, it is expected to position the service, which enables viewers to watch recent episodes of such popular prime-time shows as
The initiative was proposed by Comcast and Time Warner Inc. in 2009 to grant customers online access to TV shows and movies, once they prove they're cable subscribers. It was a bid by the cable industry to protect its distribution business from so-called over-the-top services that bypass pay-TV operators and deliver movies and TV shows directly into homes via the Internet.