Hulu was formed in 2007 by a group of media giants to compete in the emerging market for streaming video. While Hulu has struggled to compete against Netflix, its recent shift to original programming helped it bring in 8 million new subscribers last year to more than 25 million total subscribers.
Disney currently holds a 30% stake in Hulu and, through its planned purchase of 20th Century Fox, may soon control Fox’s 30% stake in the company. Comcast’s NBCUniversal subsidiary also owns a 30% stake, with AT&T owning the final 10%. Comcast has no interest in parting with its stake in Hulu, Variety said.
AT&T’s WarnerMedia is planning to launch a standalone service to stream video programs in its catalog. CEO Randall Stephenson said at an industry conference last November that he would be willing to sell off assets such as its Hulu stake to help pay down debt from the AT&T-Time Warner merger. Hulu was valued at $9.3 billion last summer, pricing a 10% stake at around $930 million.
If the talks lead to a sale of AT&T’s stake in Hulu, it could leave Disney with a 70% stake in Hulu at a time when media giants are preparing services to compete against Netflix. Last month, after Netflix increased the prices of some of its streaming plans, Hulu responded by cutting its basic subscription rate to $5.99 a month from $7.99 a month.