Hulu LLC is in talks with Time Warner to sell a stake of the online video streaming company. Hulu, which is owned by three media firms, is looking for a fourth investor, according to insider reports.
Hulu in Talks to Sell Part of the Company To Time Warner
It is expected that the deal could increase Hulu’s value to more than $5billion. At this point, talks are still in their initial stages and there is no guarantee that a deal will be reached.
Insider reports indicate that Time Warner could by a stake that equals the other three investors’, which include Comcast Corp (owned by NBCUniversal), Walt Disney and Fox Inc.
Hulu is becoming increasingly popular among online video users, with the platform adding three more movies and TV shows. The increased usage of competing platforms such as Netflix Inc. has seen a decline in TV viewership.
Hulu was introduced in 2007 to boost revenue for the three owners’ TV shows through online streaming by targeting younger viewers. In the past, the three investors had considered selling the company twice but finally decided not to and instead opted to put in $750 million for content purchases.
Some of original programming has been streamed on Hulu and shows such as Empire, South Park and Seinfeld have been licensed over the past year. In April, Time Warner also agreed to license The Last Ship and Aqua Teen Hunger Force shows to Hulu.
Hulu indicates that its online streaming service has over 9 million paying customers. Meanwhile, rival company Netflix said it has up to 69.2 million customers globally and 43.2 million in the U.S. at the end of the financial year 2014.
Speaking to analysts last week, Fox Chief Executive Officer James Murdoch said, “It is self-evident that we are committed to Hulu. We’ve invested significantly in it and we continue to obtain licenses where it makes the most sense for us and our creative partners.”