Time Warner has taken a 10% stake in Hulu and has struck an affiliate agreement that paves the way for Turner-owned networks to gain carriage on an live OTT-TV service that Hulu is preparing to launch next year.
With the investment, Time Warner, which also runs HBO, joins The Walt Disney Company, 21st Century Fox and Comcast/NBCU in the Hulu joint venture. Time Warner's stake is worth about $580 million, valuaing Hulu at roughly $5.8 billion, Recode reported, citing a person familiar with the deal.
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The carriage deal for Hulu’s new live streaming service, expected to launch in early 2017, includes TNT, TBS, CNN, Cartoon Network, Adult Swim, truTV, Boomerang and Turner Classic Movies. The carriage deal covers rights for both live feeds and on-demand content. Turner also has distribution deals with other "virtual" MVPDs such as Sony PlayStation Vue and Dish Network's Sling TV.
Hulu noted that, following the debut of its live TV streaming service, that it will continue to offer its current ad-supported and recently launched ad-free SVOD offerings. In May, Hulu, which competes in the SVOD market with Netflix and Amazon, said it was nearing 12 million SVOD subs in the U.S. amid an annual growth rate of more than 30%.
“Our investment in Hulu underscores Time Warner’s commitment to supporting and developing new platforms for the delivery of high-quality content and great consumer experiences to audiences around the globe,” Time Warner chairman and CEO Jeff Bewkes said, in a statement. “We’re also excited to join Hulu’s other owners in launching a new consumer-friendly package featuring leading networks that will deliver more value to audiences and complement Hulu’s core SVOD offerings. The inclusion of Turner’s networks in Hulu’s new streaming service furthers our efforts to allow consumers to engage with and enjoy our brands across a wide range of platforms and services.”
“This investment from Time Warner marks a major step for Hulu as we continue to redefine television for both consumers and advertisers,” added Mike Hopkins, Hulu’s CEO. “Our two companies have long enjoyed a productive relationship – which includes the availability of past seasons of popular Turner shows on our current SVOD offerings – and we are very proud that Turner’s networks will be included in our planned live streaming service.”