Online video site Hulu LLC has taken off the table the idea of going public, at least for now, and may consider other financing options, people familiar with the matter said.
Hulu’s management had been looking at an IPO as a way to raise cash, in part to license additional to content from a wider array of media companies. The company has decided not to proceed with the idea right now and may pursue other options for capital instead, the people familiar with the matter said. Those could include Hulu’s existing owners putting in more money, one of these people said.
The people familiar with the matter said that Hulu’s lack of long-term rights to its owners’ online-video programming was one reason the board and Hulu’s management have decided not to proceed with an IPO.
News Corp., Walt Disney Co. and General Electric Co.’s NBC Universal are investors in Hulu, along with Providence Equity Partners. News Corp. also owns The Wall Street Journal.
A Hulu spokeswoman declined to comment.
Jason Kilar, CEO of Hulu, shown at a conference this month, says Hulu Plus has generated ‘material’ revenue.
.Hulu CEO Jason Kilar and the senior Hulu board members from the media companies jointly invested in the site discussed possible new subscription offerings in a meeting last week, according to people familiar with the matter.
The subscription offerings would entail Hulu securing rights to distribute content it doesn’t already have, according to one of these people, who said how any new offerings might affect Hulu Plus remains unclear.
What TV programming or movies the new packages could contain—or how soon their content would be available after appearing on TV or in theaters—couldn’t be learned. The person familiar with the subscription discussions said talks were at an early stage and may not progress.
The discussions around new offerings illustrate that Hulu is still defining what sort of content it wants to be known for and how its business will work as rivals including Netflix Inc. and Google Inc.’s YouTube expand into its traditional turf of online access to TV shows.
The video site built its following by offering free recent episodes of current TV shows, and has been trying to broaden its library to include full seasons of shows and older content. It has also been branching out into new business models, as its owners look to supplement the largely advertising-supported broadcast-TV business with more subscription revenue.
This past summer Hulu introduced an invitation-only preview of Hulu Plus, a subscription service. It opened Hulu Plus to the public in November. Hulu Plus offers full seasons of some shows that previously had been limited to only certain recent episodes. The service also made it possible to watch Hulu on portable devices like iPads and Internet-connected televisions.
Some consumers have complained that the Hulu Plus selection remains limited, and the company already cut its monthly price to $7.99 from $9.99 during the preview period. Many of Hulu’s investors have been pushing it to consider other paid models that could help them earn more money from their content.
In a recent interview, Mr. Kilar said the service was outperforming Hulu’s expectations for paying subscribers, generating “material” revenue, but did not elaborate. He has said that Hulu is on track to generate $260 million in revenue for 2010.
Write to Jessica E Vascellaro at jessica.vascellaro@wsj.com and Sam Schechner at sam.schechner@wsj.com
