Hulu Employees Think Disney’s Selling It
With the return of Bob Iger as CEO of Disney, the cloud over Hulu continues to get darker following his reveal last month that everything was on the table with regards to either buying out Comcast’s 33% stake in the platform or selling it, ahead of the upcoming 2024 deadline, which requires Disney to buy out Comcast’s stake.
Hulu is celebrating its fifteenth anniversary this month, which is a huge milestone for any streaming service, but it has struggled since its creation, since it was born under the control of many different studios, with Warner Brothers, Fox, Disney and Comcast all owning a stake at one point, making the platform the go to place for next day network content. Over the years, things have changed, as each company has launched their own streaming service, leaving Hulu in an odd place.
When Disney purchased 20th Century Fox in 2019, it became the majority owner, but with the launch of Disney+ in the same year, the focus was quickly shifted to its own platform. In a recent FT article, it was revealed that Hulu had pitched for a $6 billion dollar investment to launch globally, something Bob Iger was behind. But then, in early 2020, he changed his mind, concluding such a move was premature, and then just weeks before the pandemic hit, Iger left, leaving Chapek in control.
At the time, an executive said:
“Without expanding globally, it’s not worth it. So just get rid of it now”.
This wasn’t the first time Hulu had tried to launch globally, as a decade before, Hulu’s chief executive Jason Kilar tried, but failed, when the then owners resisted, though they did manage to get it running in Japan, which is now an independent business, with no real ties to Hulu, other than in name.
Just a year later, Bob Chapek took Disney’s general entertainment global, with the addition of the Star brand to Disney+ around the world. Bringing shows like “Grey’s Anatomy”, “Family Guy”, and “Modern Family” to the platform, along with films from 20th Century Studios and Searchlight. The launch of Star globally, made a huge impact on Disney+, almost doubting the amount of content available and drastically reducing the churn of subscribers, who were now getting a variety of content weekly.
With Star being added to Disney+ globally, the expansion of Hulu has since become less likely, simply put, Disney+ subscribers outside of the US, have no need for Hulu.
Recently, Bob Iger has spoken about how he wants to cut the amount of content that is being created within its general entertainment division, as a way of cutting $3 billion. One thing he is “concerned” about is “undifferentiated” content, which puts Hulu under even more pressure. According to FT, these comments did not go down well internally at Hulu, according to employees.
“It was an affront. The takeaway was: He’s selling it.”
Rich Greenfield, who is a partner at the research group LightShed, has previously said the signs pointed to “a retrenching of Disney back to its roots” and that “it feels like something is about to happen”. As Disney leans back into its brands and franchises more, leaving Hulu with a disadvantage.
While Hulu has had some hits like “The Bear” and “Only Murders In The Building”, many of its original shows aren’t making much impact. Disney CEO Bob Iger has mentioned how FX is a great brand for the company, that it is similar to HBO, in that it makes less titles, but better titles, however recently, Puck has said that one advisor to Disney thas said there’s a lack of evidence that FX is working in any meaningful differentiated way to make a huge difference to Hulu and Disney right now.
Following Disney purchasing Hulu, many things within the streamer changed, including many original staff leaving the company, with a former Hulu employee saying:
Hulu got “absorbed inside the Disney blunt-force object. It’s hard to fathom that you don’t need a profitable 50mn subscription service in today’s world,”
While Disney has many options with Hulu, it could buy out Comcast’s stake and keep it how it is. It could turn it into a FAST platform or merge Hulu in with Disney+ to reduce costs and make a stronger platform, more in line with how Disney+ is outside of the US. Or it can sell it, either to Comcast, which would likely be a huge boost if it merged with Peacock, or to someone else. But in the current economic climate, who’s gonna buy it?
Hulu is in a weird situation right now, and with Hulu subscribers staying around the same number each quarter, but with more programming leaving and Disney planning on cutting back on its general entertainment content, at some point, Disney has to make a major decision on the future of the platform. Either way, it’s going to cost billions to do, unless they find a buyer for it.
What do you think Disney should do with Hulu? Let us know on social media!
Roger Palmer
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