Hulu's much-anticipated online TV service just added a big partner.
Time Warner announced on Wednesday that it has taken a 10 percent stake in the online video platform, a deal that will also bring a variety of popular cable channels to the bundle when it launches in early 2017.
SEE ALSO:John Oliver recaps a 'topsy-turvy' Democratic National ConventionTime Warner owns Turner Broadcasting System, which includes CNN, TNT, TBS, HLN, Cartoon Network and others. It also owns 50 percent of The CW. (N.b.: Turner recently made a $15 million investment in Mashable.)
The investment values Hulu at $5.8 billion, after Time Warner put in $583 million for its 10 percent stake, according to a person familiar with the deal.
Time Warner TV content will only appear on the live portion of Hulu's service, and will not be available on demand.
"Today, we also announced our 10 [percent] investment in Hulu LLC and that Turner has separately signed an affiliate agreement for its full suite of networks to be carried on Hulu’s live-streaming service slated for launch early next year," said Time Warner CEO Jeff Bewkes in the company's second-quarter earnings report released on Wednesday.
Then there's the crown jewel of Time Warner, HBO, which already offers its own direct-to-consumer online service with HBO Now. HBO is not part of this deal, but Hulu does already offer Showtime as an add on, leaving the door open for something in the future.
The deal also means Time Warner is now in business with a variety of its rival media companies that helped start Hulu. The company is owned by Comcast (through NBC Universal), Disney and 21st Century Fox.
The chart below gives an idea of each company's ownership, assuming that Time Warner's investment equally diluted each existing shareholder. A Time Warner representative did not respond to a request for inquiry.
Hulu's live TV service has been in the works for some time. In May, the company confirmed rumors that it would be launching the service and that it would be a standalone offering not requiring consumers to pay for a cable subscription.
Hulu has not confirmed many details on the service, although it is believed to cost around $40 per month.
Hulu's service will compete with the early entrants into the online TV market such as Dish's Sling TV and Sony's Playstation Vue.
TopicsHulu