Time Warner Taking 10 Percent Stake in Hulu

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, announced Wednesday morning, 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," Time Warner Chief Executive Jeff Bewkes said Wednesday during a conference call with analysts to discuss earnings.

Hulu, which is headquartered in Santa Monica, 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.

Time Warner had been negotiating its investment in Hulu for some time and said Wednesday that TNT, TBS, CNN and Cartoon Network would be part of a live-streaming service that Hulu is expected to launch early next year.

Established media companies have been scurrying to adapt to changes in consumer behavior by developing alternatives to traditional pay-TV packages. They hope to appeal to consumers who have been canceling or delaying signing up for bundles of channels provided by traditional cable and satellite-TV providers.

New York-based Time Warner Inc. also announced Wednesday that it's boosting its full-year adjusted profit outlook to a range of $5.35 to $5.45 per share. Its prior guidance was for $5.30 to $5.40...

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