Hulu has a variety of competitors in the online space that it needs to raise capital to edge out. If reports are true, Hulu could use the extra cash to strengthen its battle against chief competitor, Netflix. Hulu is also looking to take market share from other Internet giants that provide video content such as Google, Apple and Amazon.
If an IPO is in the works, a decision will be made by November, Reuters notes, that it is contingent upon the rights to renew many of the shows it carries, the contracts of which expire in a year.
Hulu is backed by General Electric’s NBC Universal, Walt Disney Co and News Corp. The service launched in 2007 as an attempt to bring TV shows online all while providing better video quality than YouTube.
The online video market is exploding, expected to reach a value of over $16 billion by 2012, according to ABI research, thanks in large part to paid and ad-supported services.
While Hulu is now the second-largest Web video service behind Google’s YouTube in the United States it doesn’t even rank in the top 10 sites visited that provide video content. The top five are Google (largely YouTube), Facebook, Yahoo, Vevo, and Fox, according to comScore said.
As Google has announced a content deal with Time Warner for its new Google TV service and Hulu needs to work quickly to raise more capital to pay for more content. Other considerations for Hulu include Amazon.com, which is considering a subscription video service of its own and Apple’s iTunes, which doesn’t offer a TV subscription, but does allow for rentals from the iTunes store.
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