DIRECTV (NASDAQ:DTV) is reportedly interested in purchasing the online video streaming site Hulu, according to a source cited by Reuters. The Wall Street Journal reported the story first on Friday. The media companies report that other companies are also interested in purchasing the company. DIRECTV (NASDAQ:DTV) is said to be “one of many” companies that are interested in buying Hulu.
Other Companies Interested In Hulu
Other parties that have been said to be interested in Hulu in the past were Time Warner Cable Inc (NYSE:TWC) and Peter Chernin, the former News Corp (NASDAQ:NWSA) president who reportedly bid about $500 million for the company. Chernin helped create Hulu in 2007.
Also DIRECTV (NASDAQ:DTV) was said to have courted Hulu in 2011 when it offered itself for sale. Other companies that were interested in the video streaming company at that time were Google Inc (NASDAQ:GOOG), DISH Network Corp (NASDAQ:DISH) and Amazon.com, Inc. (NASDAQ:AMZN). Negotiations stalled during that round of talks because of the end price.
Hulu And The Cord Cutting Phenomenon
Hulu is likely a very attractive acquisition target for companies like DIRECTV (NASDAQ:DTV) and Time Warner Cable Inc (NYSE:TWC), which run the risk of being left behind as technology moves away from cable and toward video streaming.
The cord cutting practice, which means that consumers are replacing cable with video streaming services, will likely increase as video streaming companies are must less expensive than cable at this point. Cable companies are in a good position to offer video streaming services because many of them already bundle broadband Internet in with their services. DIRECTV (NASDAQ:DTV) is likely interested in Hulue because of how reliant it is on its television services.
With more than 3 million subscribers who pay $8 per month for Hulu’s premium service, the company has a solid base to build upon. Last year, Hulu’s revenue was approximately $700 million. To increase its revenue, the company sells advertising in a fashion similar to how cable companies have earned revenue.