Disney’s CEO Bob Chapek continues to openly discuss the idea of Hulu being integrated into Disney+ in the future as recently, the CEO spoke at the Goldman Sachs Communacopia & Tech Conference and shared some more thoughts on the two streamers merging.
Currently, Disney+, Hulu and ESPN+ are offered in what Disney considers a soft bundle, where as internationally, Disney+ already has content from Disney’s general entertainment studios like 20th Century Studios, FX and ABC, plus with many studios consolidating their streaming services, Hulu and Disney+ merging is looking more likely. Especially as Disney has been making moves to add more general entertainment content into Disney+.
However, there are still some issues that Disney need to deal with, since Comcast still own 33% of Hulu. Bob Chapek has said that he is interested in merging Hulu into Disney+, once they can purchase the other stake of Hulu. Disney and Comcast have an agreement that either company can force the sale in 2024, unless they come to an early agreement.
We also know that there is going to be an opportunity at some point in ‘24 specifically to – because of the put/call arrangement we have on Hulu, to reconsider the way that we go to market. Now some of you may have noticed in Europe, Disney+ has a six brand tile called Star, which includes our general entertainment from a company there. And so we’ve got – we’re going to have a lot of experience in integrating Disney general entertainment into a sort of Disney+ one integrated, what I would call, right, a hard bundle. It’s a hard bundle. And so we are all about consumer choice and personalization. So we want to give the consumer choice. And whether we offer something that’s a hard bundle going forward in the future when we have the ability to do that, whether we do a soft bundle or some combination of a la carte and hard bundle or a la carte and soft bundle, we will maximize the consumer choice because we believe that benefits us and benefits our shareholders.
One of the many ideas that some Disney fans and shareholders have worried about with a potential merger of Hulu and Disney+, is how the branding will work. But internationally, Disney hasn’t seen any issues, with Bob Chapek saying:
Well, I have to tell you, the thing that you worry about when your Disney is sort of a brand friction with some of the content that we might have in a general entertainment, and I am amazed every day in this job how elastic the Disney brand is. And I would tell you that we have had no blowback whatsoever in terms of including that general entertainment content on a Disney-branded streaming proposition, which I’m not saying it would be received exactly the same in the U.S., but I think that gives us some reason to believe that we have more degrees of freedom than anybody would have ever suspected to put general entertainment on a Disney banner and still not have it be subject to organ rejection by the consumer.
Bob Chapek also shared more insight into the merger of the two streamers:
I do believe that we’d have to have full ownership of Hulu to integrate it into Disney+. We would love to get to the end point earlier, but that obviously takes some level of propensity for the other party to have reasonable terms for us to get there. And if we could get there, I would be more than happy to try to facilitate that.
2024 is not that far away, first of all, and I mean look at the success of our soft bundle. So we’re kind of doing it anyway. But you’re right, there is a little bit of consumer friction there in terms of having to go out of one app and into another. So I think we – long-term, we can avoid that. But yes, 2024 is not that far away.
Over the past few weeks, there has been lots of discussion from Bob Chapek in many different interviews about Disney’s plan, which seems to indicate they want a single platform to focus on, not just for entertainment but integrating more corporate synergy, such as offering discounts on vacations, retail and connecting to their theme parks.
Since Disney has seen so much success with offering a single platform globally, it’s not a huge surprise to see Disney preparing the US audience that a merger is likely and also sending signals to Comcast, that they want to get a deal sorted sooner rather than later. With many other streaming services merging, like Paramount+ with Showtime and HBO Max with Discovery+, it does seem a question of when rather than if, they merge. As there are many advantages to merging Hulu and Disney+ together, such as reducing costs and having a single advertising plan.
Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom.