Why a bidding war over Hulu is heating up

Everyone wants a piece of Hulu. The popular video-streaming site has reportedly attracted competing bids from a bevy of suitors, as media and internet companies scramble to snap up properties that could constitute the future of the entertainment industry.

Yahoo executives recently met with Hulu "for a get-to-know-you," reports Peter Kafka at AllThingsD. And the Internet portal has now officially submitted a bid to buy the streaming site, fresh on the heels of Yahoo's $1.1 billion Tumblr purchase.

The Internet giant isn't the only firm hoping to snap up Hulu. Rival bidders include Time Warner Cable, DirecTV, William Morris Endeavor (along with private equity firm Silver Lake Partners), Kohlberg Kravis Roberts, Guggenheim Digital, and The Chernin Group.

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Hulu's owners — News Corp., Disney, and Comcast — abandoned efforts to sell the site in 2011, but "after years of being a dance-floor rival," the site is now "the belle of the pay-TV ball," says Miriam Gottfried at The Wall Street Journal.

Owning the site "would provide greater access to the growing number of viewers watching video over the Internet," Gottfried says, which is especially important as pay-TV subscriber growth slows. The site — which boasts more than 30 million visitors each month — currently provides "content from more than 400 providers through an ad-supported free platform and a $7.99-a-month subscription service, Hulu Plus," says Gottfried. Last year, the firm raked in $695 million in revenue, "split roughly evenly between advertising and subscriptions," she adds.

While it's unclear how much Hulu might go for, the Chernin Group's bid reportedly exceeds $500 million, say Andy Fixmer, Alex Sherman and Serena Saitto at Bloomberg.

The Wall Street Journal, however, claims that if Hulu's larger rival, Netflix, is anything to go by, Hulu could potentially be worth up to $2.5 billion.

Hulu's owners resumed soliciting bids in March after Disney and News Corp. "disagreed on Hulu's direction" and "discussed buying each other out," says Gottfried. (Comcast was forced to give up its management rights in 2011, after acquiring NBC Universal.)