Hulu could sell stake to Time Warner, amid growing TV industry concern
Mon 16 Nov 2015
Video-streaming site Hulu has been in talks with U.S. media giant Time Warner, as it seeks to strengthen tactics in the fight against industry competition from Netflix and Amazon.
It was revealed by the Wall Street Journal last week [paywalled] that the online video platform had approached Time Warner for cash and media content in return for a stake in the company. Unnamed sources familiar with the matter confirmed that the discussions had been ongoing for over a month and were reportedly still in initial stages.
The amount in question is a possible $1.25bn (£823mn) investment from Time Warner – a figure which would value the video site at $5bn.
Launched in 2008, Hulu has enjoyed popularity among users looking for a platform to stream recently aired TV series. However, TV networks are now having second thoughts about selling reruns, blaming services such as Netflix for stealing away viewers and subscribers from the TV industry.
Hulu, which has around 10 million paying subscribers, is already part-owned by TV networks 21st Century Fox, Disney and Comcast’s NBCUniversal, but this will not necessarily save it from pulled reruns. In the recent Netflix Earnings Interview, CEO Reed Hastings underlined that Hulu would be a prime target for the cost-cuttings due to its practice of delivering network shows the day after broadcast.
Hulu has recently invested billions in content acquisition in order to stand out against Netflix and Amazon. It bought exclusive screening rights to CBS’ CSI in February, splurging around $120mn. It also spent a record-breaking $192mn in July for exclusive screening rights to the animated comedy series South Park for the next three years.
Despite these successful investments, if the Time Warner deal does go ahead it is expected that Hulu will have to undergo significant operational changes to account for the risk to revenue posed by the TV industry’s growing concern.
