Dish Bids For Hulu: What Are They Up To?

In another move demonstrating its commitment to streaming content, Dish Network (NASDAQ:DISH) has bid $1.9 billion for Hulu making it the highest bidder under the conditions set by Hulu owners Disney (NYSE:DIS), Comcast (NASDAQ:CMCSA), News Corp and Providence Equity.((Google and Dish top bids for Hulu, Reuters, Sept 27 2011)) Google (NASDAQ:GOOG) bid $4 billion but its offer reportedly comes with several strings attached which the owners may not be amenable to. It has also been reported that Yahoo (NASDAQ:YHOO) and Amazon (NASDA:AMZN) were involved, but their bids were much lower. ^[1] This is an interesting but not surprising development since Dish has been on an acquisition spree this year.

The interesting part is that Dish hasn’t stopped at Blockbuster when it comes to the movie and TV show rental business. The company wants more, but why?

Perhaps the answer lies in the complexity of the streaming business. This market is still evolving with no single company dominating on the content side. At such a time, the initial consolidation of businesses might be worth considering. Dish has Blockbuster and with Hulu it could complement its movie content with quality TV shows, thus creating a strong rival to the likes of Netflix (NASDAQ:NFLX).

The big picture is that Dish is being very strategic (but coy) about its future; this is evident from its acquisition of wireless spectrum and online movie rental businesses, which should lead to a bright future.

Our price estimate for Dish Network stands at $29.30, implying a slight premium to the market price

See our complete analysis for Dish Network’s stock.

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