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Hulu to sell its Japan service to Nippon TV

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Less than three years after launching a leading online video subscription service in Japan, Hulu has decided to bow out of the country.

Santa Monica-based Hulu has agreed to sell its Hulu Japan subscription service to Japan’s Nippon Television Network Corp., the companies announced late Thursday.

“We have now reached a point in the growth of the business in Japan where we feel the best path forward is to sell the company to a strategic buyer,” Hulu Chief Executive Mike Hopkins wrote in a blog post announcing the divestiture of one of the company’s most ambitious projects.

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Financial terms were not disclosed.

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The transaction, which is subject to regulatory review, is expected to close this spring.

“From the beginning of our conversations, it was clear that Nippon TV understands the value of the first-of-its-kind service the Hulu team has built in Japan,” Hopkins wrote. “I know that Nippon TV will be able to take Hulu in Japan to the next level.”

The deal marks Nippon TV’s entry into the subscription video on demand business.

The planned sale also signals a retrenchment for Hulu, which is owned by 21st Century Fox, Walt Disney Co. and Comcast Corp.’s NBCUniversal.

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Hulu Japan had been an initiative of former Hulu CEO Jason Kilar, who stepped down at the beginning of 2013 after months of behind-the-scenes turmoil over the direction of Hulu and an aborted sale of the entire company.

The Hulu Japan service, which launched in September 2011, was the first international expansion for the Internet TV service.

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The subscription service in Japan boasts content from 50 partners, with access to more than 1,000 feature films and more than 12,000 episodes of TV shows.

“Hulu will be licensing our brand and technology and will continue to provide services to the Japan business — loyal fans of the service will enjoy the same seamless user experience and product innovation they have come to love,” Hopkins wrote, thanking Hulu’s team in Japan for its efforts.

Soon after Hulu launched in 2008, executives at the venture’s parent companies began sounding alarm bells. They worried that the Hulu service would encourage television fans to cancel their cable TV subscriptions, threatening one of the primary sources of revenue for the television industry -- subscriber fees.

Hopkins, a former Fox television distribution executive, was hired last year to manage Hulu. The move was seen as a shift in strategy for Hulu and an effort to work more closely with cable and satellite TV operators.

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