Reporting from Los Angeles — The owners of Hulu have taken the pioneering online video site off the market after hoping to fetch $2 billion.
News Corp., the Walt Disney Co. and Providence Equity Partners issued a statement Thursday, saying they saw more value in retaining the popular 3-year-old service than in selling it off.
"Our focus now rests solely on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu," the owners said.
Santa Monica-based Hulu was placed on the auction block in June after its backers received an unsolicited overture for the site, which consistently ranks among the top destinations for watching video online. The free, ad-supported version of Hulu attracts more than 26 million visitors a month, according to measurement firm ComScore. This summer, the paid Hulu Plus service hit a milestone of 1 million subscribers and is now available on 120 million devices.
Among the suitors for the site were search giant Google Inc., digital media site Yahoo Inc. and satellite TV distributor Dish Network Inc.
But as the process proceeded, there was disagreement among the owners about whether to shed the asset.
In an earnings call with media analysts in August, News Corp. Chief Operating Officer Chase Carey raised questions about whether a sale was inevitable.
"We'll see where it ultimately ends up," Carey said of the bidding process. "Does it make sense to pursue that path, or, you know, does it make sense for us to stay in an ownership position and continue to have it driven by content owners?"
Comcast Corp. is also a part owner of Hulu, but as a condition of the government approval of its acquisition of NBCUniversal this year it surrendered any say in the management or operations of the company.
People familiar with the auction said the media owners were unwilling to offer long-term licenses to the entertainment content under terms that would fetch top dollar from potential buyers.
Hulu has gained traction with online viewers who come to watch current episodes of such popular shows as "Modern Family," "The Office" and "Parenthood." But during the summer, Fox imposed an eight-day wait to view new episodes of "Glee" and other popular broadcast shows on the Hulu site. Only subscribers to the Hulu Plus service or the Dish Network can see the latest shows the day after their initial airing.
Hulu's media owners position the decision to retain the site differently. People close to the matter say the service holds greater long-term value for those owners, who will continue to control a dominant online distributor with a growing advertising and subscription business.
One unanswered question is whether Hulu's chief executive, Jason Kilar, will remain at the helm. He has yet to say publicly whether he will stay with the venture that he built.