Time Warner Invests in Hulu with Plans to Join Pay TV Service

Time Warner announced it is investing $583 million for a 10 percent stake in Hulu, joining forces with existing owners Disney, 21st Century Fox and Comcast’s NBCUniversal. However, Time Warner does not plan to offer its television programming via the current version of Hulu’s video service, which features repeats of recently aired shows. Instead, the media giant will license its content for the new pay TV service that Hulu plans to launch in 2017. That means channels such as Cartoon Network, CNN, TBS, TNT and Turner Classic Movies would be available to viewers through the planned live TV service.

The investment gives Hulu a new valuation of $5.8 billion, which is about triple what it was worth in 2012.

Time Warner has argued against the repeat-TV model of services such as Hulu and Netflix in the past, suggesting that it detracts “from the value of its core business,” reports Recode.

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Instead, its “channels will run on the new live TV service that Hulu has said it wants to launch next year.” Hulu’s new offering “will compete with other live Web TV services like Sling, which already has a licensing deal with Time Warner for channels including TNT and CNN.”

Time Warner’s channels will be available via Hulu’s planned service live and on demand. The new service could “undercut traditional cable providers by competing with their inexpensive ‘skinny’ TV bundles,” suggests The Wall Street Journal.

“This one is different from all of the other Web TV packages that people have been trying to put together — because this one is being created by the people who make and sell TV,” notes Recode.