Hulu just spent $1.43 billion to rid itself of AT&T, which is soon to become a direct competitor of the streaming service.
Video streaming is set to explode as traditional studios take on tech giants like Netflix and Amazon. And as Reuters reports, Hulu just removed a potential thorn in its side by buying back AT&T's 9.5 percent stake in the streaming site.
The buyback means majority owners Disney (60 percent stake) and Comcast (30 percent stake) gain more control over Hulu going forward. For AT&T, it looks like the end of a good investment seeing as it paid $600 million for the stake originally and just got $1.43 billion back. All the money is being used to help reduce debt, while AT&T's WarnerMedia division will continue to provide content for Hulu "for years to come."
AT&T, meanwhile, will soon launch a streaming service of its own, which will feature HBO and other media properties acquired in the Time Warner merger.
Recommended by Our Editors
As CNN reports, majority stakeholder Disney has already highlighted the importance of Hulu to its future streaming strategy. For now, the attention is on the November rollout of Disney+, which will be home to classic Disney fare, major franchises like Star Wars and Marvel, and a huge slate of original content. Hulu is largely focused on next-day TV content, though it's had success with more adult original fare, like The Handmaid's Tale.
The two services working together offered Disney the most potential for growing its subscriber base, which is why Kevin Mayer, chairman of Walt Disney direct-to-consumer and international, confirmed that Disney plans to bundle Disney+, ESPN+, and Hulu together as a subscription package. The details of how that will work and pricing have yet to be revealed, though.