Hulu Owners Call Off Sale, Instead Pledging to Invest to Take On Rivals

The three companies that mutually own Hulu — 21st Century Fox, the Walt Disney Company and NBCUniversal — said Friday that instead of selling the pioneering streaming video Web site, they would make a new investment of $750 million and use Hulu’s technology to compete against other online distributors like Netflix. The announcement represented an anticlimactic end to months of sale speculation and disappointed bidders like DirecTV, that were prepared to pay about $1 billion for the site.

The Web site’s owners concluded, according to a person with close ties to the negotiation process, that the “equity value in the long run outstrips the sale value.”

“The future of Hulu is bright, and if the future of Hulu is bright, then we should hold onto it,” Robert A. Iger, the chief executive of Disney, told reporters at the Allen & Company media and technology conference in Sun Valley, Idaho. Mr. Iger said that the decision had nothing to do with the bids for the video service, calling them “good, solid offers.”

Speculation about the fate of Hulu has hung over the conference, an annual gathering of top media and technology companies normally known for the deals that emerge from lunches and quiet meetings held at the mountain resort. Mr. Iger had been seen huddling with Chase Carey, the president of 21st Century Fox, during the conference.

Mr. Carey checked out of the resort shortly before the Hulu decision was made public. But the company’s chief executive, Rupert Murdoch, was still there, and he told reporters afterward that he was “very pleased.”

The decision to stick together was made, he said, after getting Hulu’s operators — meaning Fox and Disney — on “the same page.” Seemingly casting some blame in Disney’s direction, Mr. Murdoch added, “I was always on that page.”

The companies have clashed repeatedly over Hulu for years; meanwhile, the third owner, NBCUniversal, has been a silent partner since being acquired by Comcast in early 2011. (At that time the government barred Comcast from being involved in Hulu’s business affairs, for fear that it would try to impose restrictions on Hulu to protect its core cable business.)

Hulu’s board explored a sale once before, after receiving an unsolicited bid in mid-2011, but decided to call off that sale a few months later.

For 21st Century Fox and Disney, holding onto Hulu keeps them intimately involved in the future of streaming video, a field dominated by Netflix and Amazon. The companies had little to say on Friday about how their decision to keep the site will affect the site’s tens of millions of monthly users. Currently, Hulu has a free Web site, with streams of TV episodes supported by advertisements, and a subscriber-only part of the site, called Hulu Plus, with a greater number of episodes.

While the free site is not going anywhere anytime soon, the companies might further emphasize Hulu Plus, according to people at the companies who spoke on the condition of anonymity while discussing confidential conversations. Its owners have visibly started moving down that path by placing limits on the number of shows that are streamed free the day after they are shown on television.

What the companies are almost certain to do, these employees said, is seek to turn Hulu into an industrywide “TV Everywhere” service. “TV Everywhere,” the concept that cable and satellite subscribers should be able to stream shows and channels whenever and wherever they want, has been talked about for years as a way to retain subscribers — and counter the threat from Netflix — but programmers like Fox, and distributors like DirecTV, have struggled to make it a reality.

The owners believe Hulu could help by becoming a hub for “TV Everywhere,” perhaps by adopting a login system that verifies cable and satellite subscribers’ identities and then serves up programming for them. This would be bad news for households that use the site to avoid paying for cable, but potentially good news for the people who do pay, because it would provide broader on-demand access to the hundreds of television shows that are hard to find online now.

Hulu will also continue to increase the number of original shows that it commissions, in a strategy similar to that of Netflix, which has gained attention for expensive shows like “House of Cards.” Skepticism abounded on Friday about how competitive Hulu can really be, given Netflix and Amazon’s deep pockets. But much of the $750 million infusion of cash announced by Hulu’s owners on Friday will be spent on program acquisition and program development, according to people at the companies. The money will also be spent on marketing and technology.

Some participants at the Allen & Company conference this week questioned whether Disney and Fox ever truly intended to sell Hulu, and instead used the sales process to establish a value for the video service.

DirecTV, believed by some to have been the front-runner in the bidding this summer, declined to comment on the owners’ decision not to sell. So did Time Warner Cable, which had proposed that it become a minority owner of the site alongside the other owners. Bloomberg reported late Friday that the cable company remained in talks with the owners about acquiring a stake, and said that a deal could be reached by the end of July.

Michael J. de la Merced contributed reporting.

Corner Office: Getting Ahead by Having Answers Instead of Questions

Q. What were some of your first moves when you joined Bausch & Lomb a few years ago?

A. I was hired by our board of directors to turn the company around. It had been a market leader in eye health for many of its 159 years, but the last 30 years were not the company’s best 30 years. The first thing I needed to do was understand what made the company tick. I flew to Rochester, and did a town-hall meeting that was webcast globally, but I never went to my office.

I then went on a global tour. For about three weeks, I met with hundreds and hundreds of front-line managers and colleagues and customers before I actually spent the first day in my office. I learned what was wrong, and I felt pretty confident that I could create my turnaround plan from that.

Q. What steps did you take from there?

A. I think changing a culture requires multiple actions, and actions speak louder than words. You can talk about culture all you want, but it takes a while to seep in because it’s really about what you do. We owned a skyscraper in Rochester, but a few miles away we had a manufacturing plant, R.& D., customer service, sales and marketing, all under one roof. Yet all the executives were sitting in this fancy tower and everybody who really did the work was sitting in this other facility.

So I walked in after four weeks on the road and saw my huge office with this skyline view, and I said, “This isn’t going to work. If we’re really going to create one company, one culture, one team mentality, then we should all sit together.” And so we moved all the executives out of there to the building with everybody else. It was a great symbol that we’re all in this together, so let’s all sit together.

Q. What else?

A. I learned early on that we hadn’t brought a lot of meaningful innovation to market in four decades. I looked at our R.& D. organization and I saw that the talent level in that group was really high. It dawned on me that they were really focused on getting patents and publishing papers and creating process, but not really getting product out the door. When I talked to them, I learned that they really wanted to create something in their labs that helps people and the company.

Q. Why wasn’t that happening?

A. I think the disconnect was from a lack of focus on what success was. Success wasn’t around the number of patents you had or how many papers you published. Success needed to be defined as creating products that mattered. One of the ways we did it was by a semantics shift from “R.& D.” to “D.& R.” to show people that while we invest in research, let’s prioritize the development side.

Q. What other changes did you make?

A. We also made sure we were not spending our money wastefully. R.& D. sometimes can be the black hole of spending in health care companies, and so we wanted to also create incentives for scientists not to chase dreams that had low probability of success. So we made sure we celebrated and rewarded scientists for killing things early, too. Because a lot of times, these projects become like a child to the scientist. It’s what they work on. They fear that if they get rid of it, there won’t be a need for them in the organization and so they continue to spend and figure out ways to keep their project alive against very low odds.

The way you crack that is by saying that you should celebrate your successes and that you should equally celebrate your fast kills. We all fail at things. It’s about failing intelligently and failing fast so that you don’t waste money chasing something that’s never going to make it out the door and into customers’ hands.

Q. What are some leadership lessons you’ve learned over the course of your life?

A. The best advice I ever got was from Fred Hassan, who’s one of my mentors: “Never chase the next job.” Just do the job that you’re doing today the best you can, and be selfless and do the right thing for the people you’re managing and leading and let them take the credit. Let them shine and you’ll be successful.

I’ve never asked for a promotion or a raise in my career. That’s another piece of advice I give to students: “Let your work stand on its own. If you’re in there fighting for a raise and a promotion, it means that your work’s not doing it on its own. There’s some disconnect. Go back and reflect on why.”

Q. Other lessons?

A. You should always try to make the people around you as good and strong and talented as you can, because they make you shine. I think that’s probably the biggest key to success, and it probably comes from my days as a consultant. The most successful partners all had something in common — they had developed a lot of people to become partners, and so that’s what I started to emulate when I was there.

Q. A lot of managers are uncomfortable giving candid feedback. Your thoughts on that?

A. When I first started managing people, you wanted to always just pat them on the back and say, “Great job,” and when they did something wrong, you wanted to pretend it never happened. But I learned that if you didn’t deal with those things right away, they could turn into a bigger problem. So I figured out very quickly that you had to deal with those things right up front.

Q. Other career advice?

A. I think most people don’t realize that everybody comes to the C.E.O. with problems. Most people don’t come to tell me good news. The people I rely on or view as high-potential folks are people who come with a problem but also bring ideas for the solution. It may not be the right solution. We may do something entirely different, but they’ve been thoughtful about it.

Earlier in my career, when I went to my C.E.O.’s, I walked in and said, “Here’s the problem and I have two ideas for what we can do.” I never walked in without trying to be thoughtful, and at least two steps ahead. If people are looking to advance their career, they may want to be more thoughtful about bringing some ideas for solving a problem, and not just presenting a problem.

This interview has been edited and condensed.

More Business Travelers Stay With Friends Instead of in Hotels

Under pressure to hold down costs, some business travelers are finding that the best way to save on a hotel is not to stay in one at all.

Instead, they are staying in the homes and apartments of friends and relatives when they have to go out of town.

The savings can be substantial. Andrew Schrage, founder of the financial advice Web site Money Crashers, said in an e-mail that the amount “depends on the city, but one can save more than $100 per day when you factor in lodging, food and transportation.” He added, “Once I realized how much money can be saved by staying with friends or family, it’s always my first choice whenever the opportunity is available.”

Mr. Schrage, 26, has even built the savings into bonuses for his staff. “If they chose to stay with a friend, family member or co-worker, we calculate what the lodging would have cost and issue them a cash bonus of 30 percent of that amount,” he said.

Betsy Flanagan, a social media specialist in the San Francisco area who is vice president for student engagement at Ivy Bridge College, a subsidiary of the online educational program Altius Education, said she thought she had saved “$1,000 to $3,000 a year over the past few years” by staying with friends and family, or “maybe a little bit more.”

One of her biggest savings came in 2007, when she attended the five-day PodCamp new media conference in New York. The conference’s host hotel cost $300 a night. She stayed instead with a former college roommate in Connecticut — an hour’s train ride, $20 round-trip, from Manhattan. “It was worth it for me for the cost,” she said, adding that she enjoyed the side benefit of visiting a friend, but “it wasn’t as easy as staying in the conference hotel.”

Ms. Flanagan said staying with friends was part of a larger savings strategy. “I am also very frugal with buying airfare,” she said. She will buy plane tickets a year in advance if she can, she said, and she has tried to get free conference badges by volunteering.

The payoff was more than simply saving on a particular trip. By being careful with her spending, Ms. Flanagan could afford “to go to conferences and learn things and therefore change my career,” she said.

Entrepreneurs said that saving on travel allowed them to use their money more effectively when their businesses were in the fragile, early stages. Shannon Payette Seip, co-founder of Bean Sprouts, a line of cafes, products, books and television shows focusing on healthy eating for children, said friends had also given social support and strategic advice.

“It’s great to have cheerleaders for you and your company, but also to save money until the deals fall into place,” said Ms. Seip, 39, who lives in Madison, Wis. Also, she said, “if we were in a hotel room, it would mean lying around and doing other things, TV, vegging, instead of talking or using it as meeting time.”

Dana Humphrey, who owns Whitegate Public Relations in New York, said she used the fact that she saves money by staying with friends and family as a competitive strategy. “It is a selling point for me,” she said. When she attended a pet show in Washington, for instance, she told one of her pet product clients that “they don’t have to pay for me to stay there, because I have friends in D.C.”

Ms. Humphrey, 29, added that she enjoyed the social aspect of seeing her friends on business trips. “My whole point is to get on these trips to visit friends,” she said.

But the stays are not always trouble-free. Ms. Humphrey said she could work “anywhere as long as I have a cellphone and Internet.” But that can be a challenge when friends have bad Internet connections.

“I am a demanding guest,” she said. “I don’t just want to be here for free. I want the Internet when I arrive.”

Some travelers said they used the Internet to find free or inexpensive places to stay. They search on Craigslist, as well as on paying sites like AirBnB, which allows people to rent apartments or rooms inexpensively, and CouchSurfing.com.

In an e-mail, Ms. Humphrey said that she had used CouchSurfing, “mainly with my sister,” but that she would not use it for a business trip. “Usually CouchSurfers are very open-minded and cool,” she said.

When staying with friends or family, boundary issues are to be expected. Mr. Schrage, the Money Crashers founder, said he had encountered “privacy issues when staying with friends or having them stay with me, more so than when I stay with family members.” With relatives, he said, “rules regarding privacy and boundaries are generally understood.”

William D. Pitney, 43, a financial planner in the San Francisco area, said he often stayed with relatives or friends when traveling. To avoid potential tensions, he recommended that business travelers “set the boundaries before you get into the situation.” He said travelers should ask several questions, including, “How close are you to the relative or friend?” and, “If you approve me staying there, do we have to hang out? What do you expect?”

Additionally, he said, “When it comes to friends, I have to know their spouse and that the spouse approves.”

Mr. Pitney and others also suggested helping with household chores and buying groceries. “If by staying with a friend, I saved $800 to $1,500, from this to pay $100 for the food bill, I am still saving $700 to $1,400,” he said. He and other travelers also said they took their hosts to dinner as a thank-you.

Sometimes, the small size of friends’ apartments can be problematic. Ms. Seip, the Bean Sprouts entrepreneur, said that in 2010, she and her business partner, Kelly Parthen, 40, “cramped into a one-bedroom apartment in New York the night before our ‘Good Morning America’ taping.” Her host family, she said, “had a dog, our friend was pregnant and there were baby shower gifts all over the place.” Excited about the show the next morning, their friends also wanted to talk, though the two visitors preferred sleeping.

The two also had a fear that would not arise in a hotel. In addition to baby gifts, Ms. Seip said, “we brought food for the dog, so the dog would not eat our props.” Starting a company, she added, “is a very strange road.”