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Why Hulu’s Online TV Service Could Be a Money-Spinner for AT&T

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Hulu’s online television service

Time Warner (TWX) has a 10.0% stake in Hulu, a video streaming service. Hulu is jointly owned by The Walt Disney Company (DIS), Twenty-First Century Century Fox (FOXA), and Comcast (CMCSA). On June 23, 2017, MediaPost reported, citing MoffettNathanson Research, that Hulu’s online television service could earn around $71.1 million in advertising revenues and $568.3 million in fees from subscribers to its service. That’s a total of around $600.0 million in revenues.

According to the report, $600.0 million in revenues was only possible if Hulu’s online television service could sign up 1.2 million subscribers.

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Time Warner has already licensed its content to Hulu’s online television service and sees a revenue growth opportunity in the rise of these services. According to the company, the rise in online television services indicates that the demand for cheaper skinny bundles with quality content is on the upswing.

How AT&T is likely to benefit from Hulu

Time Warner believes there is a content licensing opportunity in the rise of these services.

Since AT&T has proposed to acquire Time Warner, the acquisition, if approved, could result in higher content licensing revenues for AT&T. The acquisition could also result in AT&T using its distribution platform to market Hulu’s online television service in a better way. It’s also possible that AT&T could use its viewership data to provide more targeted advertising on Hulu, resulting in more advertising revenues for the online television service.

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