Currently, Time Warner will not contribute any of its content to Hulu, but it will stream live TV services on Hulu platform next year when it starts its live streaming services.
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Time Warner announced on Wednesday that it agreed to buy a 10 percent stake in Hulu for $583 million. The company’s quarterly fell 5.4% year-over-year to $7 billion.
Hulu’s addition of Time Warner’s various media properties to its lineup is a massive boost for its forthcoming online live subscription television service.
Hulu now offers on-demand streaming of many popular TV shows the day after they’re broadcast. Hulu’s new service, confirmed in May, has threatened to further undercut traditional cable providers by competing with their low-priced “skinny” TV bundles.
“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.
With its investment in Hulu, Time Warner joins Walt Disney Co., 21st Century Fox, and Comcast, which also already own stakes in Hulu.
The company’s shares were up 1.58 percent in premarket trading on Wednesday.
Time Warner separately reported net income for the second quarter of United States dollars 952 million on revenues of USD 6.95 billion.
In the official release, Mr. Bewkes also said Time Warner is making a 10% investment in Hulu LLC. Its 2016 per-share earnings, excluding some items, are now expected to be in the range of $5.35 to $5.45. Time Warner continues to make sure the Turner networks have the widest possible distribution, but are doing so without compromising too much traditional cable and satellite offerings, and it seems to be paying off. Those networks will span many categories, including things like Cartoon Network, TBS, TNT, CNN, Adult Swim, and Turner Classic Movies, among others. The consensus estimate now stands at $5.39 per share. Revenues were up 2 per cent to $1.5 billion as subscription revenues rose 6 per cent.
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Excluding items, the company earned $1.29 per share, compared with the average analyst estimate of $1.16, according to Thomson Reuters I/B/E/S.
