Hulu is looking to sell a stake to Time Warner Inc., part of a deal that would value the company at more than $5 billion, people familiar with the matter told The Wall Street Journal.
The move would allow Hulu to advance its efforts to compete against Netflix, Inc. and Amazon.com, Inc.
The Wall Street Journal adds that the two companies have been in talks about Time Warner becoming an equal stakeholder in Hulu, together with Walt Disney Co., 21st century Fox, Inc. and Comcast Corp.
For the deal to happen, all three owners, who each owns one-third of Hulu, have to draw down their stakes to 25 percent each.
The Wall Street Journal adds that one of the people said that the talks are still in the early stages and not yet advanced.
The people asked not to be identified because discussions are private.
The Wall Street Journal adds that the deal would help the company broaden its content and take on Netflix.
The people said that the discussed terms would have Time Warner invest in cash and commit to license content to Hulu beyond what it already sold.
One of the people told The Wall Street Journal that Hulu's interest in bringing in Time Warner is about "long-term strategy."
Paul Sweeney, an analyst with Bloomberg Intelligence, told Bloomberg that the deal would make Hulu a significant competitor to Netflix.
"With Time Warner in the mix, it is hard to see a scenario where Hulu doesn't become a more meaningful competitor to Netflix," he said.
Bloomberg adds that the owners had introduced Hulu in 2007 to generate additional sales for their TV shows online.
The service would also help the owners generate appeal to the younger audiences.
Bloomberg adds that the owners had explored selling Hulu twice, but ultimately decided to hold on to it and invest $750 million and add more content.
The company invested the money in original programming and to license shows like "Seinfeld," "South Park" and "Empire" in deals over the past year.
Bloomberg adds that Time Warner's Turner Broadcasting has licensed shows "Aqua Teen Hunger Force" and The Last Ship" to Hulu last April.
