AT&T Sells Hulu Stake
AT&T Inc. sold its minority stake in Hulu back to the company in a deal that values the streaming video site at around $15 billion, a sharp jump from more than two years ago. Hulu, which is now owned by two major media companies, has been trying to build a service that can rival Netflix Inc. and other streaming services that are competing for the attention of television watchers.
AT&T inherited its stake when it acquired Time Warner Inc. and had said it planned to sell its position to focus on its own streaming service, which it plans to launch this year. On Monday, AT&T said it sold the 9.5% stake for $1.43 billion. AT&T said it would use the money to “reduce its debt.”
Between this and Disney’s acquisition of key Fox assets, Hulu’s joint venture is down to just two companies, Disney and Comcast. It’s not yet certain just how this affects the ownership ratios, but Disney already had majority control with 60 percent while Comcast had a 30 percent share. This further consolidates power and could influence what appears on the service, not to mention bundles and other strategies for growing its footprint.
Not that you couldn’t see this coming. AT&T’s WarnerMedia is developing its own streaming service and it’s expected to behave a lot like Hulu — just with an emphasis on in-house properties like Warner Bros., HBO and Turner. A financial stake in a competing service could easily be problematic. This helps AT&T avoid conflicts of interest and focus on its own plans.
In a statement Monday, Hulu Chief Executive Randy Freer said “WarnerMedia will remain a valued partner to Hulu for years to come as we offer customers the best of TV, live and on demand, all in one place.” In January, Hulu lowered the price of its basic plan, which lets users stream TV shows with ads but doesn’t include live sports and news. It also raised the cost of its live TV offering, joining a trend that has lifted the price of traditional channels across the media industry.