Time Warner CEO Jeffrey Bewkes
Photograph by Scott Eells/Bloomberg—Getty Images

It would value the streaming service at more than $5 billion.

By Andrew Nusca
November 12, 2015

Hulu, the popular Internet video streaming service, is seeking to sell a stake to Time Warner TWX that would value it at more than $5 billion, according to a Wall Street Journal report.

Three major media companies—Walt Disney DIS , 21st Century Fox FOX , and NBCUniversal owner Comcast CMCSA —already own equal stakes in the service, which competes with Netflix NFLX and Amazon Instant Video AMZN .

The Journal reports that those companies would likely draw down their investments to allow Time Warner into the ownership group. Time Warner owns HBO, Turner (TNT, TBS, Cartoon Network, truTV), and Warner Bros.

The move suggests that the content wars continue for so-called “over-the-top” streaming services, which are distributed over the Internet, rather than exclusively through conventional cable TV packages. The rise in adoption of OTT services by cord-cutters and Millennials has placed pressure on the traditional business deals media companies strike with cable companies. The fallout has been fragmented at best. Some media companies have chosen to go it alone, such as CBS CBS ) and its All Access app or Time Warner’s HBO and its HBO Go service. Others, such as Comcast-owned NBCUniversal, have been more willing to experiment even as it tightened its relationships with the old guard.

All the while, standalone services such as Netflix have seen an erosion of their licensed libraries as media companies, emboldened by the creation of their own streaming services, refuse to renew agreements. It’s a race: Netflix and Amazon have invested heavily in original content because they foresaw this eventual pullback. Hulu has, too.

Until now Time Warner, which spun off Time Warner Cable TWC in 2009, stood on the sidelines. It has made certain films available on services like Netflix and built HBO Go, which is reasonably well regarded in the industry. A stake in Hulu would give it a guaranteed home (and technology platform) for its myriad TV shows and films and reinforce the company’s position against Netflix and Amazon.

Some 181 million people in the U.S. are expected to watch video streamed over the Internet this year, according to estimates by eMarketer, a market research firm. About 63% of them will watch Netflix, 36% will watch Amazon, and 33% will watch Hulu.

Time Inc., Fortune‘s publisher, was owned by Time Warner until 2014.

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