In another win for cable cord-cutters, Time Warner has become the latest media company to invest in streaming service Hulu.
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Total revenue fell 5 percent to $7 billion. If all goes as planned, the product will be launching early next year, but no specific date has been given at this time.
Time Warner also owns HBO, but that brand’s offerings aren’t mentioned as being part of this deal, with the focus on Turner content for both Hulu’s current streaming video on demand, and future live streaming video platforms. CNN’s parent company is buying a 10% stake in Hulu.
Time Warner on the same day released its second quarter financial reports.
The conglomerate is under pressure to recapture television viewership lost from the pay-TV ecosystem.
Hulu, with the cash infusion and Time Warner’s strategic backing, now has additional firepower to challenge subscription VOD leader Netflix in acquiring original shows, cutting licensing deals and expanding its service. The company is owned by Comcast (through NBC Universal), Disney and 21st Century Fox. Second-quarter results also compare to the Thomson Reuters consensus estimates for $1.16 EPS and $7.05 billion in revenues.
Time Warner, the second-largest cable provider in the U.S., has been fighting to attract younger viewers as more move away from buying cable subscription services in favour of cheaper streaming services. 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. The deal will see Time Warner Inc. networks including TNT, TBS, CNN, Cartoon Network, Adult Swim, truTV, Boomerang, and Turner Classic Movies coming to Hulu’s new live TV venture, which is set to compete with the likes of Sling TV, Playstation Vue, and others. Its prior guidance was for $5.30 to $5.40 per share.
The company says it now expects 2016 adjusted earnings per share from continuing operations to end up between $5.35 and $5.45 – up five cents from its previous forecast.
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Time Warner separately reported net income for the second quarter of Dollars 952 million on revenues of USD 6.95 billion.
