Los Angeles based Hulu has purchased AT&T’s stake in the streaming service. This means that Hulu now only has two owners. Disney is the majority partner with a controlling stake in the service with Comcast Corp being the minority partner.
The purchase from AT&T cost Hulu $1.4 billion. The entire service is said to be worth $15 billion. Disney became the majority owner in the company upon its purchase of 21st Century Fox. Hulu is expected to lose $1.5 billion this year. Disney doesn’t expect it to become profitable until 2023. Disney is hoping the streaming service will have between 40 million and 60 million subscribers by then.
The next step for Hulu is to decide how to split the 9.5% stake that it purchased from AT&T between the remaining two owners. According to a Hulu spokesperson, there is time to figure this out.
AT&T acquired its stake in Hulu last year when it purchased Time Warner Inc. AT&T intends to use the sale of its share of Hulu to help pay down debt from that purchase. Time Warner Inc., now called WarnerMedia, will continue to supply content to Hulu.
Hulu recently lowered its entry-level ad-supported version to $6 per month which Disney says led to an influx of new subscribers. It is also considering going international as well. Hulu is part of Disney’s extensive investment in streaming service. Disney is also launching Disney+ this November and already has launched ESPN+.