The recent launch of Redbox Instant by Coinstar, Inc. (NASDAQ:CSTR) and Verizon Communications Inc. (NYSE:VZ) also brings in more competition in the Internet streaming space. Redbox currently offers only 4600 titles along with 4 DVDs redeemable at thousands of Redbox kiosks across the country. Redbox Instant’s CEO stated that its service will appeal to a different clientele who enjoy physical discs. And also, Redbox Instant is unlikely to pursue an original content strategy in the near-to-medium term.
In addition, Time Warner Inc. (NYSE:TWX)’s premium cable network, HBO had more than 114 million subscribers across the globe consisting of 41 million premium subscribers in the U.S. and 73 million international premium and basic subscribers at the end 2012.
As users need cable and an HBO subscription to view HBO Go, the price point is at a much higher rate, compared to the other lower cost streaming services.If HBO Go is offered as a standalone service it will be a material threat for other low-cost streaming companies.
Hulu’s co-founder and CEO, Jason Kilar will be handing over the reins by the end of March, and will be replaced by another senior executive, Andy Forssell in the interim CEO. News Corp (NASDAQ:NWSA), Disney and Comcast Corporation (NASDAQ:CMCSA) each own about a third of the company.Disney and News Corp. are in discussions regarding the company’s future, and are considering selling the company and also altering its business model. Walt Disney wants an advertising-based business model, whereas, News Corp. prefers a subscription-based model.
As a result, Disney or News Corp (NASDAQ:NWSA). might consider buying the stake of the other. Comcast’s NBC had to hand over its voting rights and board seat, in connection with Comcast’s controlling position of NBC.
As a result, Comcast Corporation (NASDAQ:CMCSA) would likely stay on as a minority investor. In October 2012, Hulu bought back 10% of the company from Providence Equity Partners’ for $200 million, giving the company a valuation of $2 billion, which likely factors in a big discount for lack of marketability. However, Disney and News Corp are currently in the process of putting together their future plans for Hulu.
Control of Hulu in the hands of News Corp. or Disney shouldn’t have a big impact. Hulu stated its top-line revenues grew 65% year-over-year to ~ $700 million; however, it did record a loss driven by higher programming and marketing costs.
In spite of these numerous changes going on at the company, Hulu’s outgoing CEO stated that the company is all set to hit new records for both revenue and subscriber additions in Q1 2013. And Hulu continues to get content from its current owners at favorable terms, and can add many subscribers down the road.
The article Hulu Becoming Stronger in Video Streaming originally appeared on Fool.com and is written by Ishfaque Faruk.
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