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Will Time Warner Participate in Hulu’s Online Television Service?

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Aug. 18 2020, Updated 6:28 a.m. ET

Time Warner’s participation in Hulu’s service

The OTT (over-the-top) landscape continues to change with new entrants. Early in May 2016, the New York Times reported that Hulu was developing an online TV service. It’s expected to launch in 1Q17. According to a Wall Street Journal report, The Walt Disney Company’s (DIS) channels and 21st Century Fox’s (FOXA) Fox News, FX, and regional sports networks are also expected to be available on Hulu’s online TV service.

Time Warner (TWX) was asked about its participation in Hulu’s proposed online television service in the company’s fiscal 1Q16 earnings call. It said it would follow Disney and Fox in terms of programming becoming available on Hulu’s new service.

The company also said it would like its networks to be available on each of the new packages. It foresees consumers increasingly demanding access to their favorite programming through SVOD (subscription video on demand) services such as Hulu.

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Time Warner also said it wanted the programming on Turner and HBO networks to be on demand. It said, “And we would like to see most of our networks, whichever exhibition window, first run or syndication, to be on-demand. And we are basically in an enviable position, that our networks, Turner and HBO, are among the most desired networks for consumers, and therefore to be included in all these packages.”

Rising trend of online television service

As indicated by the rising popularity of streaming services such as Netflix (NFLX), viewers are watching more and more content online. According to a Digitalsmiths 4Q15 video trend report and as the above graph shows, Netflix leads the OTT market with a 48% share, followed by Amazon (AMZN) with 20%.

Hulu, Time Warner’s HBO Now, and CBS’s (CBS) All Access are smaller players in this market. However, with Hulu’s proposed online television service, the streaming market could be set for an upheaval.

The SPDR S&P 500 ETF (SPY) has an 0.18% exposure to 21st Century Fox. SPY also has a 3.5% exposure to the computer sector.

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