Hulu, the video streaming service, just announced its intention to bring in a new investor to the mix.
Currently, Hulu LLC is owned by three media companies, and it is now in talks with a potential fourth owner of the company.
As reported by Reuters, Hulu is looking to sell a stake to Time Warner Inc., which would result in the streaming company to be valued at above $5 billion. Moreover, the talks include cash investment and content licensing.
However, Bloomberg reported that the talks have not advanced, and there is no guarantee yet of an agreement according to the parties involved.
But if the deal does push through, Time Warner's investment could equal those of Hulu's current investors, namely: 21st Century Fox Inc., Walt Disney Co. and NBCUniversal.
Reports said that the streaming service has given an added significance for its owners as they put more movies and TV shows online.
With the rise of similar streaming service like Netflix Inc., also currently the leading streaming service provider, the decline of TV preference has become undeniable.
Paul Sweeney, an analyst from Bloomberg said, "With Time Warner in the mix, it is hard to see a scenario where Hulu doesn't become a more meaningful competitor to Netflix."
CNN Money expressed the same sentiments and said that an investment from the company could accelerate Hulu's effort to compete better with Netflix and even Amazon's streaming service.
But first, Time Warner needs to conclude the Hulu deal is in the best interests of its own shareholders. According to a report, the company owns CNN, HBO and huge network of other cable channels, in addition to the Warner Bros. production studio.
Jeff Bewkes, Time Warner's chief executive officer, has been one of the main proponents of what is called as "TV Everywhere," which lets cable and satellite TV customers watch shows via the Internet by authenticating with a username and password.
Along with other streaming services, Hulu can be seen as an alternative to cable TV. Company CEO Mike Hopkins has tried to work with cable companies on "TV Everywhere" strategies and just earlier this year, he nailed his first deal with Cablevision.
In addition, Hulu has introduced an ad-free option to its service, but it costs $12 a month. Nonetheless, many prefer this option since it is absolutely free from commercials and interruptions especially in the case of TV episodes.
As reported, Hulu announced that it has now more than 9 million paying customers, making it all the more an attractive investment for Time Warner Inc.
However, those numbers are dwarfed by its rival Netflix, when it said that it currently has 43.2 million subscribers just in the U.S. alone.
As of now, the parties involved have yet to reach a tentative agreement.
