Time Warner takes a 10% stake in Hulu, boosting it to compete with Netflix

Media giant Time Warner has agreed to take a 10% stake in Hulu, becoming the fourth major media company to put its weight behind the increasingly popular online video-streaming service. The deal better positions Hulu to compete with industry leader Netflix by bulking up Hulu’s supply of high-quality programming. The move also accelerates Time Warner’s foray into video streaming, coming more than a year after the company launched the stand-alone HBO Now service to attract consumers who are not inclined to subscribe to a traditional cable TV package. Time Warner also owns the prominent Turner Broadcasting cable channels CNN, TBS, TNT and Cartoon Network. “This investment fits our strategy like a glove,” said Time Warner Chief Executive Jeff Bewkes.

Hulu, which is headquartered in Santa Monica (CA), was launched nearly a decade ago by NBCUniversal, now owned by Comcast, and Rupert Murdoch’s 21st Century Fox. Walt Disney Co. later joined Hulu. Disney, NBCUniversal and Fox each own 30% of Hulu, giving Time Warner the smallest stake. Time Warner pledged about $583 million for its piece, which values Hulu at nearly $6 billion.