With this Hulu investment, Time Warner not only gets to profit from Hulu’s growth, it now has potentially another outlet to cross-promote its own streaming platform, HBOGo. But for Hulu’s current streaming service, there could be more to the deal than meets the eye.
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Details of the investment were not disclosed but some reports said Time Warner was investing some United States dollars 580 million, which would value Hulu at close to USD 6 billion. The company did not disclose the financial terms of the deal, however it was reported that Time Warner was paying about $580 million for the stake, which would give Hulu a valuation of about $6 billion. The culprit? Dwindling viewership as consumers choose to cut cable-provider cords and watch video online.
“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 CEO Jeff Bewkes said in a press release.
The streaming TV service Hulu is gaining a fourth parent: Time Warner, the parent of CNN.
The deal means that more series and movies that air on Time Warner-owned channels will be available for streaming. Meanwhile, Sling TV said Wednesday they will offer NFL Network and NFL RedZone in time for the NFL season this fall, following a similar move by PlayStations Vue in July.
Through its stock repurchase program, Time Warner bought back approximately 29 million shares of common stock worth roughly $1.6 billion from the beginning of the year through the end of the second quarter.
Time Warner’s deal with Hulu comes nearly a month after Comcast said that it’s adding Netflix to its X1 set-top boxes, another move from a traditional media titan collaborating with a streaming media site.
Hulu, which launched its on-demand online service in 2008, plans to expand with live streaming networks early next year.
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The conglomerate joins Hulu co-owners 21st Century Fox, Walt Disney Co. and Comcast/NBCUniversal in the SVOD venture.
