Time Warner has just bought a 10 percent stake in Hulu, joining existing partners Disney, Fox, and Comcast. There also may be more competition soon, as US regulators are weighing new requirements that would require the TV industry to allow technology companies such as Google and Apple to sell cable boxes, too.
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Time Warner said revenue in the second quarter fell 5 percent from a year earlier to $7 billion while profit fell 2 percent to $952 million. According to Time Warner, Hulu’s service will “offer an intuitive and personalized interface, and instant access to live and on-demand content….”
Time Warner has been bullish on over-the-top services in the past, launching HBO Now to great success previous year.
The cable-like bundle of streaming channels is expected to launch early next year.
The Time Warner investment “marks a major step for Hulu as we continue to redefine television for both consumers and advertisers”, Mike Hopkins, CEO of Hulu, said in a release.
The conglomerate joins Hulu co-owners 21st Century Fox, Walt Disney Co. and Comcast/NBCUniversal in the SVOD venture.
The deal means that more series and movies that air on Time Warner-owned channels will be available for streaming.
Time Warner Inc (NYSE:TWX) announced a strong Q2 print at market closing yesterday, following which the stock rallied in the pre-market.
Excluding items, the company earned US$1.29 per share, compared with the average analyst estimate of US$1.16.
The company launched its own steaming service HBO Now a year ago and it has tried to attract viewers with “binge-watching” marathons of select television shows.
Time Warner also raised its earnings guidance for the year. The consensus estimate now stands at $5.39 per share.
The results are a sign that Time Warner is still benefiting from its traditional cable business even as the TV industry grapples with declining ratings and cord-cutting. Lower demand for video games, home entertainment and TV licensing pushed revenue down and its Warner Bro’s unit by 19%.
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Sales at HBO rose 2 percent to $1.5 billion. Those networks will span many categories, including things like Cartoon Network, TBS, TNT, CNN, Adult Swim, and Turner Classic Movies, among others.
