Disney’s Upfront Events Could Shape Its Streaming Future
Later this month, Disney is hosting an upfront event at the North Javits Center on May 16th, which is a lavish event that exists to woo advertisers to buy advertising slots on their linear television networks and streaming platforms. During the event, advertisers are given previews of the new and existing shows for the upcoming fall/winter season.
During the upfront events, which ABC has been doing annually since the 1960s, some trailers and news on upcoming shows are also released to the public, but the events themselves aren’t usually broadcast to the general public.
Jimmy Kimmel was going to be hosting the event, but due to the writer’s strike, if he still hosts the event, he won’t do his usual roast of Disney and its executives.
In a recent report by Deadline, this year’s Upfront events are even more important to Disney, who are trying to get the entertainment division back into profitability after years of losses due to the costs of building, launching and maintaining its streaming platforms like Disney+.
Late last year, Disney+ launched its ad-supported tier in the United States and apparently a third of signups in February were on this lower-cost tier, which is expected to grow as new subscribers take a slightly cheaper option. An international launch of the ad-supported tier is also due to be happening this year, but nothing has been said about this since last year.
With so many different streaming services around, Disney is under pressure to make its streaming division more profitable, which it has previously stated is expected to do by 2024.
The future of Hulu is still hanging over the company, as due to an agreement made in 2019, Comcast or Disney can invoke a clause in the contract that means Disney will have to buy out Comcast’s 33% stake in the streamer, valued at a minimum of around $9 billion. Though there have been reports that Comcast might be interested in buying Hulu to boost Peacock and Disney CEO Bob Iger has also said anything is on the table regarding selling Hulu.
Wall Street is putting more pressure on Disney, and the future of Hulu is a major sticking point, as should Hulu get sold off, it would likely result in the bulk of its Disney-owned content migrating to Disney+, which is why the ad-supported tier was so important to launch. Internationally, Disney+ already offers a wide selection of content from across Disney’s studios, including Hulu Originals like “The Dropout”, “Pam & Tommy”, and “Only Murders In The Building”.
With Hulu’s advertising business brings in over $3 billion per year in revenue, compared to Disney+ US advertising, estimated to be just a third of that this year. Disney+ won’t be able to match Hulu’s advertising revenue for a while, though an international rollout of advertising offers huge growth potential. Adding more general entertainment shows would also likely increase revenue on advertising on Disney+, since, currently, many of the shows and films can’t show advertising due to the content being aimed at young children. Merging Disney+ and Hulu.
Advertising revenue is going to be a key factor for the future of Disney’s streaming services, and recently, a report from Wells Fargo stated that Disney would be “foolish” to sell the service to a rival. So merging Hulu and Disney+ could help boost advertising and reduce costs such as with advertising, server costs, less content being required etc. Getting rid of Hulu’s lucrative ad business probably isn’t a good idea at the moment, but now that Disney+ has been prepped, with some more mature content, better parental controls and an ad tier, plus the two platforms have begun sharing more content between them, a merger would help keep the ad-revenue coming in the US, while also offering a global rollout of advertising, to make it more profitable.
The upcoming upfront event, will be crucial for the streaming side of Disney, especially for Disney+ and could set out Disney’s streaming plans for years to come.
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