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Time Warner has confirmed that it is buying a 10% stake in online TV service Hulu, after lengthy talks with the loss-making service, reports Variety. It has been reported that the stake is costing the company around $580M, valuing Hulu at $5.8B.

The deal means Time Warner will be partners with existing owners Disney, 21st Century Fox and Comcast’s NBCUniversal, and that Time Warner’s channels like Turner and CNN will be part of a new pay TV service Hulu wants to launch next year.

Variety reports that the cash injection will help Hulu compete with market leader Netflix.

Hulu, with the cash infusion and Time Warner’s strategic backing, now has additional firepower to challenge subscription VOD leader Netflix in acquiring original shows, cutting licensing deals and expanding its service.

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