New York-based media company Time Warner now holds a 10-percent stake in major streaming TV and movie company Hulu.
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Picture credits: ThinkStockTime Warner Inc. acquired a 10% stake in Hulu LLC, casting an eye to the future of TV even as its second-quarter results proved there’s still plenty of life in the traditional cable model.
The revenue miss appeared to have been cancelled out in investors’ minds Wednesday morning by the announcement of Time Warner’s new stake in Hulu.
Time Warner a year ago moved into video streaming by launching the stand-alone HBO Now service.
The new streaming service is said to be one that broadcasts live TV over the internet, an option for those who still want to watch live TV but don’t want to pay for a cable subscription. The content will be available live and on-demand on Hulu’s new live-streaming service for set-top and mobile devices, scheduled to debut early next year, which is created to compete with MVPD’s low-priced “skinny bundle” offerings. Part of today’s news is that Time Warner channels CNN, TNT, TBS, Cartoon Network, Adult Swim, Boomerang, truTV, and Turner Classic Movies will be part of that service, providing both live and on-demand content.
Time Warner joins Disney, 21st Century Fox and Comcast in the streaming-TV service joint venture.
The sluggish performance turned in by its Warner Bros. unit in the second quarter was largely to blame for the overall revenue fall and reflected the company’s need for a more consistent source of content licensing revenue. With a live service including Turner, Hulu will widen its identity beyond that of Netflix rival.
According to the print, the company earned revenue of $7 billion during the quarter in line with consensus estimate of $7.05 billion.
“This investment fits our strategy like a glove”, Time Warner Chief Executive Jeff Bewkes said Wednesday during a conference call with analysts to discuss earnings. A Time Warner representative did not respond to a request for inquiry. Profit was $952 million, down from $971 million a year earlier.
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The company increased its full-year guidance, anticipating earnings per share between $5.35 and $5.45.
