Hulu explores selling stake to Time Warner

Hulu is now owned by a trio of media companies: Disney (which owns ABC), 21st Century Fox (which owns FOX), and Comcast (which owns NBC).

According to a new report, Hulu is looking to sell a stake to Time Warner that will value the company at $5 billion and bring a ton of new content to the service.

Take a look at a few of Hulu’s recent big-ticket content deals and you should get the picture: The company acquired the exclusive streaming rights to CBS’s hit crime drama CSI in a deal estimated to be worth at least $120 million in February. Institutional Investors own 81.94% of Time Warner Inc. shares. Nomura reissued a hold rating and issued a $85.00 price objective (down from $93.00) on shares of Time Warner in a research note on Monday, September 21st.

It’s unclear, therefore, that taking a stake in Hulu would do anything but give Time Warner less flexibility about the so-called “window” between when programming debuts on a Turner network and when it’s carried on video platform. Annual revenues are $1.2 billion, according to estimates.

“We know one of the benefits of an ecosystem like Netflix is its lack of advertising”, Howard Shimmel, a chief research officer at Time Warner, told Bloomberg.

It is supposedly in talks with Time Warner Inc.to add it as its fourth investor said the people who have knowledge of the situation.

The Journal, citing sources familiar with the prospective deal, said that Hulu proactively approached Time Warner about two months ago.

“A good chunk of this new generation is being raised as to only know Netflix, Hulu, Amazon prime, etc. This issue will only continue to snowball unless TV changes”, commented one Redditor, explaining why ads is only part of the equation.

Almost nine-tenths of digital video viewers in the USA already watch video content services like Hulu.

But Hulu still lags far behind Netflix in its number of subscribers. An investment in Hulu, a streaming service with a different DNA than Netflix, would be a wrinkle in that strategy.

Interestingly, the analysts at Barclays believe Hulu’s ad-supported revenue model could make it a strong competitor to Netflix.