Media and entertainment group Time Warner acquired a 10% stake in US-based television streaming platform Hulu yesterday for a price reported by the Wall Street Journal as $583m.
A person familiar with the matter told WSJ Time Warner invested at a valuation roughly three times that at which it last raised funding in 2012. It will not however take a board seat as part of the deal.
Founded in 2006 by media group News Corp and entertainment conglomerate NBC Universal, Hulu launched in 2008 and offers monthly subscribers on-demand streaming of television programming and films.
Entertainment group Walt Disney invested an undisclosed amount in 2009, adding content from its ABC Family, Disney Channel and Soapnet channels and becoming an equal partner with News Corp and NBC Universal, with each owning a 27% share.
Private equity firm Providence Equity Partners had paid $100m for a 10% stake in Hulu in 2007, later exiting in 2012 by selling its stake to the media partners for $200m.
Disney, 21st Century Fox and Comcast – the latter two the parent companies of News Corp and NBC Universal – now each own 30% to Time Warner’s 10%.
In addition to becoming an equity investor, Time Warner will also supply content from channels including TNT, TBS, CNN, Cartoon Network, Adult Swim, TruTV, Boomerang and Turner Classic Movies for a live streaming service Hulu intends to begin offering in early 2017.
The feature will in effect allow Hulu to begin competing with established cable networks by offering a substantial suite of cable channels that can be watched live online.
Mike Hopkins, Hulu’s chief executive, said: “This investment from Time Warner marks a major step for Hulu as we continue to redefine television for both consumers and advertisers.
“Our two companies have long enjoyed a productive relationship – which includes the availability of past seasons of popular Turner shows on our current [subscription video on demand] offerings – and we are very proud that Turner’s networks will be included in our planned live streaming service.”