Time Warner ‘eyes Hulu stake’

Time Warner could become the latest media giant to invest in American on-demand platform Hulu.

Hulu CEO Mike Hopkins

The Wall Street Journal reports Time Warner has been in talks with current owners Comcast, The Walt Disney Company and 21^st Century Fox about becoming an equal stakeholder in the platform.

This would mean each of those companies, whose stakes currently sit around 33.3%, would drop down to 25%, with Time Warner also taking a quarter of the shareholding.

A deal is likely to value Hulu at around US$5 billion to US$6 billion. It would also mean only CBS Corp. is the only media group with a US broadcast network that doesn’t have a stake in Hulu.

CBS has chosen to go its own route with its CBS All Access platform, which recently announced a new Stars Trek series as its first exclusive original.

Time Warner owns the Burbank-based Warner Bros. studio; and Turner Broadcasting System, which houses TNT, TBS and Cartoon Network; and premium cable HBO.

According to WSJ sources, the current backers see Time Warner investment as giving Hulu a better footing against the increasingly powerful Netflix and Amazon Prime Instant Video.

They had tried to sell the company back in 2013, with Time Warner Cable – spun out of Time Warner in March 2009 – considered to be a frontrunner for an acquisition at the time.

The sale process was scrapped and the partners then injected US$750 million in the business. Reports at the time suggested a 25% stake sale to TWC could have still gone ahead.

Hulu made an equity loss in the recent quarter ending October 3 due to higher content and marketing outlays, which have rocketed over the past 18 months, but investment will continue to go up in the next year, Disney revealed last week.