Cable's decline: An incentive for Yahoo - Hulu deal

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HuluReuters reports on the first-ever subscriber decline for the U.S. TV multichannel industry.
Research firm SNL Kagan showed the worst combined subscriber performance of cable, satellite TV and telecom video providers since it started tracking data in the 1980s.

Some figures:

SNL Kagan estimates that almost 3 million U.S. households will use Hulu and other Web TV options as their primary video solution by the end of the year, up from 1.5 million in 2009. For 2011, the company expects that figure to hit 4.3 million. (There are about 115 million TV households in the States.)

On the 'media attitude', the following is mentioned:Yahoo!

With media giants planning more Web TV offers that require a cable or satellite TV subscription -- part of their TV Everywhere initiative -- "this will cramp some of the flow" to Internet-only, but there still is "plenty of content" available online that will tempt more people to stop paying cable or other TV bills, Olgeirson added.

Here is where Yahoo could come in the picture.
Stifel Nicolaus analyst Jordan Rohan suggest:

that Yahoo should either buy Hulu or take a “significant stake” in the video site, saying that Hulu’s reported interest in an IPO opens it up to other types of deals too.

The reasoning of Rohan’s suggestion for Yahoo is an interesting one:

“While an investment in Hulu doesn’t solve Yahoo!‘s long term relevancy problems single-handedly, it could reinforce Yahoo!‘s position as a core entertainment destination.”

For Hulu, a significant investment by Yahoo might also be better timed than an IPO. Hulu is valuated at more than $2 billion.

Other tech or media giants could have interest as well according to Rohan:
"Given that Microsoft is cooperating with Yahoo in search, maybe those two companies would consider investing together."

About Hulu
Hulu is an online video service that offers a selection of hit shows, clips, movies, and more at and numerous destination sites online and across four screens — PCs, TVs, mobile phones and tablets. Hulu's selection of premium programming is provided by more than 225 leading content companies, including FOX, NBC Universal, ABC, Lionsgate, MGM, National Geographic, Paramount, A&E Television Networks, PBS, and Warner Bros. Television Group.


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