Time Warner Cable is considering making a bid on the streaming-video service, Hulu, in hopes of implementing a bundle package for customers. The American cable company’s plan would give viewers access to their favorite shows without having to pay for a premium service.
An unidentified source told Bloomberg that the company is considering buying an equity stake in the video service that “could offer Hulu to its customers as a bundled service inside and outside of the home with its current products.”
Under the new deal, if it ever gets done, Time Warner Cable would own a 33 percent stake in Hulu while the rest will remain with the current co-owners. At this time, Hulu is jointly owned by Disney, Comcast, and News Corp.
Time Warner’s CEO Glenn Britt is looking for a way to produce packages for customers that are affordable and he recently stated that the cable industry’s “structure needs more flexibility.”
He would like to offer a quality service at a cheaper rate to expand the company’s reach. The deal for Hulu could do just that, though other companies like Amazon.com Inc. have been rumored to have interest in bidding as well.
Hulu is on the rise as the company reported a revenue of $695 million in 2012 and a total of $3 million subscribers to their premium Hulu Plus service. The revenue totals are up 65 percent from 2011, the same year Google and Yahoo were rumored to be interested in buying the company. At the time, Hulu was valued in the $2 billion neighborhood.
Guggenheim Partners LLC was hired by the company to serve an advisory role for their sale in 2011 that never happened. They will serve the same role if there is a sale this year, though they have also shown interest in making their own bid for the company, according to a report from Bloomberg.
Jean-Paul Colaco, senior vice president of advertising at Hulu, said this month that the company hopes to double their number of advertisers this year as it targets local businesses, which could be a direct reason for the sale.
Time Warner is on the same page, as they expect the move could bring in more ad revenue and also make regional advertising easier and more efficient.
Do you believe the video service will be offered at a lower rate with better features if Time Warner Cable buys into Hulu?
[Image via Ildar Sagdejev]