No IPO for Hulu; More Subscription Plans Possible

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Hulu has, at least temporarily, nixed its plans for an IPO. The Wall Street Journal reports that no official reason was given for this decision, but sources close to the situations credit Hulu’s lack of long-term rights to its video-streaming content.

Hulu had hoped a stock offering would enable it to raise the cash it needs to license additional content for streaming. Instead it now must look at other methods of raising capital like additional investments from its current investors, which include News Corp., Walt Disney Co, NBC Universal, and Providence Equity partners.

Another option for raising cash that Hulu is apparently considering-and which its investors seem to like– is expanding its paid subscription offerings. It currently only offers Hulu Plus for $7.99 per month, which gives subscribers access to full seasons of shows non-subscribers can only stream a few episodes of while also allowing them to watch content on portable devices like the iPad. Hulu CEO Jason Kilar said in a recent interview that Hulu Plus is outperforming expectations and that the company is operating at a profit with an expected $260 million in 2010 revenue.

Unfortunately for Hulu, much of that revenue must be used to compete with Netflix and You Tube which are aggressively expanding into Hulu’s arena of streaming television shows online. Hopefully the added competition will lead to better service for users, not just more paid subscription plans.