US cable firm Time Warner buys 10% stake in Hulu

Time Warner has disclosed a 10% stake in the video streaming service Hulu as the company battles growing competition from Netfilx and Amazon.

Time Warner, owner of CNN and Cartoon Network, made the announcement in its quarterly earnings report.

Chief executive Jeff Bewkes said the company was committed to "supporting and developing new platforms".

The company also raised its full-year earnings forecast to $5.35-$5.45 per share, up from $5.30-$5.40.

Profit for the quarter fell from $951m (£714m) to $971m.

Time Warner, the second-largest cable provider in the US, has been fighting to attract younger viewers as more move away from buying cable subscription services in favour of cheaper streaming services.

The company launched its own steaming service HBO Now last year and it has tried to attract viewers with "binge-watching" marathons of select television shows.

Under the terms of the Hulu deal, Time Warner's television unit, Turner - which includes TNT, TBS, CNN and Cartoon Network - will be available live and on-demand on Hulu's new live-streaming service, which launched next year.

"The Hulu investment is not a surprise," said Matthew Harrigan, an analyst at Wunderlich Securities.

"They want to ensure that the Turner networks have the broadest possible distribution without really compromising the traditional cable, satellite and telco channels," Mr Harrigan said.

Walt Disney, 21st Century Fox and Comcast already own stakes in Hulu. Time Warner did not disclose the details of the purchase price, but reports by the tech website ReCode suggest it could be close to $580m.

Revenue for the Turner unit climbed 6.5% during the quarter and HBO, which hosts popular shows such as Game of Thrones and John Oliver's Last Week Tonight, saw 2% revenue growth.

Time Warner Cable completed a merger with Charter Communications earlier this year.