Hulu could file to go public later this year, with an IPO scheduled for early 2011, according to a report by Reuters. The wire service reports that the popular online video site could raise between $200 and $300 million in the public offering, which would value the company at approximately $2 billion.
Hulu could use proceeds from the public offering to help it acquire more content and better compete with online video offerings from Netflix (s NFLX) and Apple. (s AAPL) While its primary business to date has been distributing broadcast video online in an ad-supported format, the company recently announced its Hulu Plus subscription offering, which places it head-to-head against Netflix. It is also aggressively making Hulu Plus available on a number of CE devices including the Sony (s SNE) PlayStation3, Microsoft (S MSFT) Xbox 360, iPhone, iPad, (s AAPL) TVs and Blu-ray players from Samsung, Sony and Vizio, as well as TiVo (s TIVO) DVRs and Roku set-top boxes.
One potential stumbling block could be Hulu’s distribution deals with broadcasters, many of which are set to expire next year. Hulu distributes videos from content providers such as Disney, (s DIS) Fox (s NWS) and NBC (s GE), among others, and an IPO will largely be contingent upon it being able to extend those deals before filing. Those content providers are also Hulu’s corporate parents, with each holding a 30 percent stake in the venture. While they would all profit handsomely off an IPO, the broadcasters might not be as keen on supporting Hulu’s ambitions once it becomes independent.
According to Reuters, the company is expected to file for IPO by the end of the year, (just in time for NewTeeVee Live, which Hulu CEO Jason Kilar is keynoting) with the actual offering taking place sometime between January and May, depending on market timing. Morgan Stanley will likely lead the underwriting, Reuters reports.
Hulu was founded three years ago as a joint venture between NBC and Fox, with Disney joining the mix in early 2009. Since being founded, Hulu has grown dramatically, boasting revenues of more than $100 million in 2009. In April this year, Hulu said it was on pace to double that in 2010.
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