So what’s going on with Hulu?
The streaming service is one of Disney’s crown jewel platforms, a place where adults can watch material that’s often a bit too mature for the kids. In terms of general entertainment streaming platforms, it doesn’t have quite the reach of Netflix or what will soon be called Max, but when you combine Hulu with Disney+ and ESPN+ (and there’s a discount bundle that allows you to do that) it's very competitive.
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But a lot of people have wondered about the fate of Hulu. Thanks to Disney purchasing 21st Century Fox (FOX) in 2019, the company owns a majority stake, 66%, in Hulu, while Comcast (CMCSA) owns the remaining 33%. (And lately, it's been pulling the majority of films and television shows from the platform and placing them on Peacock.)
In January 2024, Disney can require Comcast to sell its stake in Hulu, and Comcast can force the sale. But Disney could also decide to sell Hulu to a different company, and pull its non-licensed material from the platform and place it on Disney+. Sure, some parents might complain that episodes of “Phineas and Ferb” are on the same platform as decidedly not-safe-for-the-kids shows like the FX rapper-comedy “Dave,’ but if you throw on some parental controls it’ll mostly be fine.
Well, Disney CEO Bob Iger had his first quarterly report since returning to the position, and he indicated that…he’s still thinking about what to do about Hulu and would like a little more time, if you don’t mind.
Disney’s Subscriber Numbers Were A Bit Soft
In the most recent earnings report, Disney+ lost 4 million subscribers to end the latest quarter with 157.8 million. And no, the loss isn’t because Disney went “woke” or whatever, or because the most recent season of “The Mandalorian” isn’t hitting like it used to. The actual reason for the loss is due to the combo of Disney+ Hotstar in India, which lost the rights to the wildly popular IPL cricket matches.
But while Iger is still figuring some stuff out, he did announce that he plans to combine Hulu material with Disney+ content into one streaming app in the U.S. by the end of the calendar year, while also continuing to offer the services as stand-alone entities.
“While we will continue to offer Disney+, Hulu and ESPN+ as standalone options, this is a logical progression of our [direct-to-consumer] offerings that will provide greater opportunities for advertisers while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger said. Its not clear at the moment which Hulu material might make the move.
Also, the price of Disney+ without advertisements is set to increase this year. It's currently $10.99 a month on a standalone basis, but Iger plans to bump that up in order to “widen the delta” relative to the ad-supported plan, which is $7.99 a month.
“We plan to set a higher price for [the Disney+] ad-free tier later this year to better reflect the value of our content offerings,” Iger said on the call. He called the service’s net loss of 4 million subs in the first three months of 2023 “was relatively small” and has led Disney “to believe that we, in fact, have pricing elasticity,” he said.
Iger revealed he’s had “constructive” talks with Comcast about acquiring Hulu outright, but nothing was set in stone, adding “it has not really been fully determined” what will happen with Hulu, but he felt that the content on Disney+ combined with “general entertainment content” is a very strong proposition for the consumer.
“So where we are headed is for one experience, with general entertainment content on Disney+,” he said. “If, ultimately, Hulu is that solution… we’re bullish about that.”
