Who buys Hulu? Most likely, no one

Silicon Alley Insider is reporting that, now that Hulu's auction is completed, the company's owners have some hard decisions to make. Comcast, News Corporation, Disney and Providence Equity Partners were looking for well north of $2 billion for Hulu, but they didn't get it. More accurately, they got it, but not in the way they wanted.

(Update, October 13, 2011: AllThingsD has reported that Hulu's owners have called off the company's sale and will continue to manage it themselves.)

The top bidder for Hulu was Dish Network, which bid around $1.9 billion dollars, more than either Yahoo or Amazon. Google apparently offered far more--around $4 billion--but the company wanted guaranteed access to Hulu's owners' content for much longer than the two to three years that had been offered. Without that kind of concession, the Hulu deal is really a two to three-year non-exclusive license to its content, not an "acquisition" in any real sense.

That's why Dish, Yahoo and Amazon weren't willing to spend even $2 billion for the company. Hulu's partners could more than double Dish's bid overnight by accepting Google's terms, but I don't think they will. They believe that their content, and the investment they've made in the Hulu platform, is worth more than $1.9 billion, and they're not willing to extend longer terms, given the rate of change in the online content market. Therefore, it's most likely that they'll cancel the auction and keep Hulu themselves.