Time Warner Inc. is in serious talks to buy a 25 percent stake in video-streaming service Hulu, and it has an agenda: to stanch the flow of people ditching pay-TV for online streaming, The Wall Street Journal reports, citing "people familiar with the discussions." The discussions are centered around Hulu's competitive advantage over rivals Netflix and Amazon: It posts episodes from the current seasons of TV shows, sometimes the day after they air on TV. Time Warner believes that the current seasons on Hulu contribute to people "cutting the cord," or dropping the pay-TV subscriptions that account for the bulk of Time Warner's profits.
Time Warner wants current seasons of its shows — it owns networks TBS and TNT, among others — off Hulu but won't make that a condition for buying a quarter of the company, The Journal says. But its long-term goal is to make online streaming tied to pay-TV subscriptions, and Hulu just might play along. Already, Hulu puts some TV shows behind a paywall for pay-TV subscribers, a plan that Time Warner has endorsed in the past. That would be bad news for cord-cutters, but probably not fatal for Hulu. Thanks to its acquisition of Seinfeld and other older shows, plus its original series, only about a quarter of its streams today are reportedly tied to current-season deals.
Hulu's current owners include Walt Disney Co., Comcast, and 21st Century Fox. It has 10 million U.S. subscribers, versus Netflix's 45 million. You can read more about Time Warner's intentions at The Wall Street Journal.
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