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Wednesday, August 10, 2011

New Patent Lawsuit Against Hulu Could Derail Efforts to Secure a Buyer

Hulu ‘for sale’ valuation of $2 billion may very well have to be readjusted.

HuluJust last week, Hulu learned that its users will have to start paying for what was previously free content, courtesy of a new pricing policy from Fox. The company now has to contend with a patent lawsuit, filed by interactive programming guide vendor, Rovi. The lawsuit, filed in the U.S. District court of Delaware, alleges breach of patents related online TV program guides, as well as products dealing with online search. Rovi is asking for unspecified damages as well as legal costs.

According to media analysts, Rovi has penchant for suing over patents, and Hulu can probably not expect much to come from the filing. In the past Rovi has sued Toshiba, Amazon and others over patent infringement. But even if the Rovi lawsuit comes to nothing, Hulu will surely have concerns over its operations.

Much of the ‘asking power’ that Hulu has is based on the perception that the company has all the necessary licensing and patent issues all sorted out. If Hulu now has to start announcing pricing adjustments for content, deal with patent lawsuits, it could easily make potential buyers nervous.

The lists of suitors for Hulu include Yahoo, Google, and even Apple. Clearly these are not the sort of buyers that will part with $2 billion without confidence. It’s now up to the people who run Hulu to make sure their mammoth asking price is justified.

Do you think Hulu is worth $2 billion? Leave your thoughts below in the comments.

View the original article here

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