Time Warner Acquires Part of Hulu, Leaving Big Questions

Time Warner Grabs 10 percent of Hulu. Will that mean big changes for subscribers?

By Kris Wouk August 3, 2016

Hulu Seinfeld — Andrey_Popov/Shutterstock

Early this year, reports surfaced that Time Warner Inc. was not only looking to acquire a 25 percent stake in Hulu, but also had plans to push for major changes to the streaming service’s format. Now the company has indeed managed to buy a piece of Hulu, but not as much as it had originally planned — and that could be a good thing for customers.

Time Warner Inc. has purchased a 10 percent stake in Hulu, the two companies announced in a press release on Wednesday. The company paid $583 million in the deal, which will see it joining The Walt Disney Company, 21st Century Fox, and Comcast, each of which owns a 30 percent stake in the streaming service.

As part of the deal, Time Warner Inc. will also join part of Hulu’s planned live internet TV service, which is slated to arrive sometime in 2017. The deal will see Time Warner Inc. networks including TNT, TBS, CNN, Cartoon Network, Adult Swim, truTV, Boomerang, and Turner Classic Movies coming to Hulu’s new live TV venture, which is set to compete with the likes of Sling TV, Playstation Vue, and others.

“This investment from Time Warner marks a major step for Hulu as we continue to redefine television for both consumers and advertisers,” Hulu CEO Mike Hopkins said in a statement. “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.”

That’s a plus for customers who want to subscribe to Hulu’s live service, rumored to cost around $4o per month. But for Hulu’s current streaming service, there could be more to the deal than meets the eye. One of the marquee features Hulu offers customers is the ability to watch current seasons of TV shows as soon as the day after an episode airs, starting at just $8 per month ($12 per month without commercials). Current season streaming is something that has defined Hulu since its inception, and helped it carve out a place as one of the top streaming services in the U.S. marketplace.

Time Warner Inc. apparently isn’t a fan of that; not only will the company avoid offering current seasons of its own shows on Hulu — only past ones — but part of its interest in acquiring a stake in the company was reportedly to eventually shift the service away from airing current seasons of TV shows, period.

Of course, things have changed since February when those reports about Time Warner’s plans first broke — Hulu hadn’t yet announced its plans for a live TV service, for example, and Time Warner also didn’t acquire as much of the company as it had reportedly hoped. Still, Hulu is already on the path to becoming more like traditional cable services. The question is, how far down that path will it go? For those who already love Hulu’s current offerings, change of any kind may not be welcome.

As always, we’ll be following these events as they unfold so stay tuned and check back with us as Time Warner Inc. makes its move.

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