Even Cable is Leaving Cable: Time Warner Acquires Stake in Hulu

Variety has the story:

Time Warner is taking a 10% stake in Hulu — joining existing owners Disney, 21st Century Fox and Comcast — and as part of the investment Turner will bring its cable networks to Hulu’s live-streaming TV service set to launch in 2017.

Terms of Time Warner’s Hulu deal initially were not disclosed. Time Warner later confirmed it is investing $583 million, which implies Hulu is worth nearly $6 billion. The media conglom had been in talks to buy a piece of Hulu for months, with news of a potential deal surfacing last fall.

Hulu, with the cash infusion and Time Warner’s strategic backing, now has additional firepower to challenge subscription VOD leader Netflix in acquiring original shows, cutting licensing deals and expanding its service. With Time Warner’s buy-in, Comcast’s NBCUniversal, Disney and Fox each now own 30% stakes in Hulu.

“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 announcing the deal.

It also probably underscores Time Warner’s acknowledgment that their entire business model is changing and being challenged at a rapid pace. This is classic, “If you can’t beat ’em, join ’em.” Rather, it’s the corporate twist on that: “If you can’t beat ’em, buy ’em.”

Personally, I haven’t been a big fan of the Hulu platform-the ad delivery was clunky and far too frequent. By the time it got around to rolling out an ad-free option Netflix and Amazon Prime had their original content hooks in me so deep I just wasn’t interested.

Still, anything that gives any of the streaming platforms the wherewithal to create more original programming is a boon to the consumer (as well as to those of us in the entertainment industry) so this is definitely welcome news.

What will be interesting going forward will be seeing how much freedom cable companies acquiring stakes in streaming platforms give the new kids and just which side will be adapting to the other’s way of doing things.