Time Warner is buying a stake in Hulu. The cable giant is acquiring 10% of the video streaming service for $583 million, Time Warner’s chief financial officer revealed during the company’s earnings call this morning.
This expands Time Warner’s content distribution and helps the company reach a younger audience that is less interested in subscribing to traditional cable. Walt Disney Co, 21st Century Fox, and Comcast are also shareholders in Hulu.
Time Warner’s quarterly profit hovers in the range of $1 billion, but Hulu, sources suggest, is not profitable. Even so, the cable giant raised its financial forecast for the year based on optimism surrounding the acquisition, and investors agree: the company’s stock is up 4%.