Time Warner is considering the possibility of becoming a part owner of Hulu — joining Disney, Fox, and Comcast — the Wall Street Journal reports today citing “people familiar with the matter.” One of its sources says that the talks “aren’t advanced.”
Still, it seems that the players are circling around terms that would give Time Warner a 25% stake in the streaming service in a deal that values Hulu at more than $5 billion, the paper says. The goal would be to help Hulu challenge Netflix and Amazon.
Hulu has become the preferred streaming service for traditional media companies as they’ve come around to the view that their content sales to Netflix have encouraged viewers to cut the pay TV cord.
Time Warner CEO Jeff Bewkes told analysts last week that he’s reassessing the company’s strategies to syndicate its shows to streaming services.
Warner Bros chief Kevin Tsujihara said on the call that “maintaining the integrity and health of the [pay TV] ecosystem is critical to maximizing the long-term value of the content. And therefore… we’re constantly evaluating the right methods, the right distributors, the right partners first to monetize our content, both domestically and globally.”
But several companies have conspicuously warmed up to Hulu including AMC Networks, Epix, Sony, FX, and Viacom.
The deals have come at a high cost. Disney COO Tom Staggs told analysts last week that “Hulu has and is going to continue to step up their investment in both acquiring and producing original programming and programming from others, and that will continue to increase their losses in the near term.”