Business

Hulu faces hurdles to stock offering

Hulu’s plan to go public as early as this year has some in the industry wondering if the online TV hub is really ready for primetime, despite its popularity and profitability.

The venture, which is backed by big media companies, is reportedly exploring the idea of an initial public offering that would value the company at as much as $2 billion. The news was first reported by the New York Times.

That’s considered by some media watchers as a rich price for a company that generated about $100 million in revenue last year and is still figuring out the best way to profit from the TV shows that appear on its site.

“It just doesn’t make sense to me,” said one Internet TV executive. “What’s their story?”

Hulu is looking to supplement its free ad-supported site. The company is testing a $9.99-subscription package, Hulu Plus, that will offer a more extensive library of shows and be available on more devices such as Apple’s iPad. Although Hulu announced the pay service in June, it has yet to be fully rolled out.

Hulu, which is owned by Walt Disney Co., NBC Universal and News Corp., as well as Providence Equity Partners, is also dealing with backers that may have divergent views on the direction of the site. (News Corp. also owns The Post.)

“There are very different strategic philosophies because of the various owners,” said Spark Capital partner Dennis Miller. “News Corp. is going one way and NBC is going another.”

Another complication for Hulu is that NBC Universal is in the midst of a takeover by cable operator Comcast Corp., which could easily view Hulu as competition for cable subscribers. Comcast also owns Fancast, a direct rival to Hulu.

Hulu was the 10th most popular online video property, attracting 28.5 million viewers in July, up from 24.7 million in June, according to online tracker comScore.

Hulu holds the No. 1 rank in video ads viewed, serving up some 783,000 videos ads, compared to its nearest rival the Tremor Media Video Ad Network on 452,000.