That bought the company a 10 percent stake, less than joint owners Disney, Comcast and 21 Century Fox, parent companies of ABC, NBC and Fox. In addition to the equity purchase, the companies have also signed a new affiliate agreement which will allow Hulu’s new live streaming service to carry Turner’s lineup of popular channels.
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“Our investment in Hulu underscores Time Warner’s commitment to supporting and developing new platforms for the delivery of high-quality content and great consumer experiences to audiences around the globe”, Time Warner chairman and chief executive Jeff Bewkes said in a statement.
The deal doesn’t include Time Warner crown jewel HBO, and it doesn’t put any on-demand shows from the company on Hulu’s Netflix-like service of TV repeats and originals.
You might think of Hulu as the place to go for TV shows the day after they’re broadcast. However, these will be added to Hulu’s new live streaming service that is expected to launch next year and not the existing Hulu platform. It also operates stand-alone streaming services for some of its networks, including HBO.
By investing in Hulu and making its current-season content available on Hulu’s soon-to-debut cable-TV service, it could gain an online market it wasn’t reaching before-but it might also cut into its own traditional cable revenues.
This comprehensive version of Hulu could become the dominant TV cord-cutting service. Time Warner continues to make sure the Turner networks have the widest possible distribution, but are doing so without compromising too much traditional cable and satellite offerings, and it seems to be paying off.
This deal will not enable Time Warner’s aforementioned networks be accessible on the $7.99 monthly package. Time Warner Inc. reportedly limited its investment, and settled for a non-controlling interest in the SVOD company, to limit regulatory concerns. The cable provider earned $1.29 per share on an adjusted basis, up 4 cents from a year-ago and higher than the $1.16 EPS analyst were expecting, according to a Thomson Reuters survey.
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The company’s net income fell to $951 million, or $1.20 per share, in the second quarter ended June 30, from $971 million, or $1.16 per share, a year earlier.
