Peter Chernin bids $500 million for Hulu

That's quite a discount from the $2 billion that Hulu's owners were asking for two years ago. Then again, the digital world has gotten more complicated and competitive, what with streaming services like Netflix and Amazon generating original content, and the networks and studios still trying to figure out how to license their own content. Hulu, which is owned by News Corp., Disney, and Comcast (though Comcast no longer has corporate control), has been losing money and faces a debt load of $300 million - perhaps another reason for the low-ball bid. (Another possibility, says ATD's Peter Kafka, is that the offer would cover only a limited set of program rights.) Not helping value the operation is a mishmash of a business model that mixes ads and subscription revenue. But the real issue, as with all these services, is reaching a critical mass of programming. Reuters, which broke the Chernin story, doesn't say whether the offer is being seriously considered. Sounds like we're in for a extended bidding process. Chernin, of course, is the former News Corp. executive who helped create Hulu in 2007. From ATD:

Though Hulu's owners are talking to other would-be buyers, including Ross Levinsohn, the former News Corp. executive who once managed the site, News Corp. and Disney are still discussing scenarios where one or both companies hang on to the site (co-owner Comcast gave up its management rights to the site as a concession to federal regulators a few years ago). If Chernin ended up with Hulu, it'd be an excellent full-circle story, if nothing else. During his News Corp. tenure, Chernin was one of the site's primary architects and boosters; many people think that his departure from News Corp. was a huge blow for former Hulu CEO Jason Kilar. Also interesting: Chernin has a big slug of funding from Providence Equity Partners, Hulu's initial investor, which sold its stake in Hulu last year. If Chernin ended up buying the site, Providence would essentially end up as a Hulu backer again.