The Hulu alliance also could come in handy – or perhaps even complicate – Time Warner’s own strategy of streaming shows on HBO Now. Time Warner later confirmed it is investing $583 million, which implies Hulu is worth almost $6 billion.
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New York-based Time Warner Inc. also announced Wednesday that net income for the April-July quarter fell 2 percent to $952 million, or $1.20 per share, from $971 million, or $1.16 per share a year ago.
An exact release date and pricing for Hulu’s new live streaming service have not been announced yet, but the platform is expected to launch in early 2017.
As a part of its involvement with Hulu, Time Warner’s Turner family of networks will be a part of the streaming service’s upcoming live streaming service which will launch next year.
“They want more robust on-demand capabilities and they expect a greater variety of content packages”, said Time Warner CEO Jeffrey Bewkes in a call with investors.
Time Warner is joining forces with rivals Walt Disney, Comcast and 21st Century Fox as a shareholder in the video streaming company. The company also remains focused on acquiring programming like “Empire”, “Homeland”, “Seinfeld”, “Curious George”, “South Park” and “Fear The Walking Dead” as well as creating original programming that builds upon shows such as “The Mindy Project”, “The Path”, “Difficult People”, “11.22.63” and “Casual”. The HBO’s streaming service had almost one million subscribers as of March.
As more families and individuals are running away from cable TV, Time Warner is finding its way to online video services led by Netflix and Amazon.
Mike Hopkins, CEO of Hulu, said, “This investment from Time Warner marks a major step for Hulu as we continue to redefine television for both consumers and advertisers”.
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Time Warner has been bullish on over-the-top services in the past, launching HBO Now to great success a year ago. But overall sales fell 5% in the second quarter and missed Wall Street’s estimates, mainly due to a almost 20% drop in revenue at the company’s Warner Bros. movie and TV studio. On an adjusted basis, earnings per share were $1.29, topping the $1.16 predicted by analysts who were polled by S&P Global Capital Intelligence.
