Time Warner Binges on Hulu

Big entertainment conglomerate buys 10% stake in popular OTT video provider and makes Turner networks available for Hulu's upcoming live streaming service.

Alan Breznick, Cable/Video Practice Leader, Light Reading

August 3, 2016

2 Min Read
Time Warner Binges on Hulu

In another sign that major TV content providers are looking to bypass traditional pay-TV distributors and go direct to viewers, Time Warner has purchased a 10% stake in Hulu and plans to have its Turner-owned networks participate in Hulu's upcoming live streaming service.

Time Warner Inc. (NYSE: TWX), which has reportedly been angling for months to become an equal stakeholder in Hulu LLC , announced the investment this morning in a joint press release with Hulu. With the 10% stake, which is reportedly worth about $580 million, Time Warner will join Hulu's other three big Hollywood owners -- Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s NBCUniversal LLC , Walt Disney Co. (NYSE: DIS) and 21st Century Fox .

But the latter three conglomerates, which formerly each held a 33% stake in Hulu, will continue to be larger shareholders. So Time Warner apparently will not fulfill its ambition to become an equal stakeholder, at least not yet. Time Warner and Hulu did not disclose financial terms of the deal beyond the 10% stake.

Notably, the investment pact will also allow Hulu to carry Time Warner's Turner family of networks on the new live streaming service that the OTT provider is planning to launch early next year. The Turner portfolio of networks includes TNT, TBS, CNN, Cartoon Network, Adult Swim, truTV, Boomerang and Turner Classic Movies. Hulu will have the right to offer all eight networks both live an on-demand on its new streaming service. (See Hulu Eyes Cable-Like Bundle – Report.)

Hulu, which already offers both ad-supported and ad-free subscription VoD (SVoD) services, intends to use the live streaming service to compete against such "skinny bundle" OTT services as Dish Network LLC (Nasdaq: DISH)'s Sling TV offering. Hulu also aims to ratchet up the competition with such major rivals in the OTT market as Netflix Inc. (Nasdaq: NFLX), Amazon.com Inc. (Nasdaq: AMZN) and Google (Nasdaq: GOOG)'s YouTube Inc. .

Privately owned Hulu, which has been growing steadily along with the rapidly expanding OTT market, revealed in May that it was closing in on 12 million SVoD subscribers in the US. It boasts an annual growth rate of more than 30%.

— Alan Breznick, Cable/Video Practice Leader, >Light Reading

About the Author(s)

Alan Breznick

Cable/Video Practice Leader, Light Reading

Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.

As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.

Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.

He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.

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