Recently, Disney+ has received lots of criticism in the United States that it doesn’t offer enough content for teenagers and adult subscribers, that isn’t connected to Marvel and Star Wars.

Since Disney+ launched, more streaming services have launched, including Paramount+, HBO Max and Peacock, all offering content for everyone.

In the past year, the growth of Disney+ subscriptions in the United States has slowed, and shareholders/analysts have been quick to point out the weakness in Disney’s streaming platforms.  Having three different streaming packages in the US spreads their content, so they can’t compete with other platforms like Netflix.


While internationally, Disney+ added content for the entire family, with the inclusion of the general entertainment brand Star, as the sixth hub.  Which saw hit shows like “Modern Family”, “Desperate Housewives”, “Lost”, and many more onto the streaming service. In the United States, Disney+ is still being held back from adding entertainment for older viewers, primarily due to the existence of Hulu.

Former Disney CEO, Bob Iger, was always very vocal about keeping Disney+ as a family-friendly streaming service and keeping Hulu as the general entertainment brand.  But as shareholders, subscribers, and analysts have continued to apply pressure to Disney, even Bob Iger recently revealed that he recognises that Disney+ needs more content for everyone and that Disney’s CEO Bob Chapek is going to deal with the situation.


One of the big problems for Disney’s streaming services, is that Comcast still owns a 33% stake in Hulu.  Disney, Fox, Comcast and WarnerMedia were all co-owners of Hulu until Disney purchased 20th Century Fox, to become the majority owner.  AT&T quickly sold its 10% stake, resulting in Disney owning 66% and Comcast owning 33%.  A deal was made that gave Disney operating control over Hulu, with a clause that in 2024, Disney can force Comcast to sell its share, or Comcast can force Disney to buy its stake at a price valued by an independent body.  Recently, Comcast said it was in no rush to sell its share as Disney keeps adding value to Hulu.

Recently, Lightshed Partners, a technology, media and telecommunications research firm, revealed their Top 22 predictions and events for 2022 and one of their predictions is that Disney will buy out Comcast’s stake in Hulu later this year and believe it’s a top priority for Bob Chapek.

Sole ownership of Hulu will allow packaging changes for Disney’s suite of SVOD products. While Disney has created a synthetic bundle to-date, we believe management realizes a far tighter integration is critical to winning long-term.  It is possible Disney+ could morph into the long talked about broader Disney-as-a-service tied to theme park admission, movie tickets and discounts on merchandise.  However, we believe it is more likely that Disney+ morphs into a broader SVOD service leveraging the Disney brand while providing fully integrated access to a wider array of content.  Disney is already doing this in Europe where Star is a tile on Disney+ and we would expect it to look similar in the US with Hulu.  We would not be surprised to see a Disney+ subscription become a prerequisite for a Hulu subscription, much like basic cable/HBO and ESPN+/UFC PPVs.

Lightshed Partners also believe that it will cost Disney around $15 billion to buy out Comcast’s stake in Hulu, which is higher than the current agreement of $9 billion.


Bob Chapek has previously said that since Star was introduced into Disney+ internationally, it has reduced the churn of unsubscribers and also increased engagement in how much content is watched.  And Bob Chapek has also said having multiple streaming platforms in the US isn’t ideal.

Merging Disney+ and Hulu together would be similar to how Disney+ Hotstar operates in India and other countries in Asia, which offer live sports and licensed content from other brands.  Currently, Disney+ in Europe doesn’t offer live sports, though it does have a considerable collection of ESPN documentaries.

 

So do you think Disney+ and Hulu will morph together?


 











Roger Palmer

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. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

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3 Comments

  1. Alex January 11, 2022

    Lightshed = Rich Greenfield, the dumbest analyst in the history of mankind. He's been spouting this 15B nonsense for a couple of years now. Only way Disney buys that is if they get licensing content from Comcast for 5+ years AND the equity to Hulu AND the Marvel theme park/Hulk movie/other smaller rights Comcast owns that Disney wants.

  2. nerdrage January 11, 2022

    Merging Hulu (and other grownup content) into an expanded flavor of Disney+ (Disney++?) seems inevitable, the only question is timing. I'm not sure that the recent subscriber growth weakness for Disney+ is due to Americans churning due to lack of variety in content, but if that's what Disney is finding, they better hurry up this merger because Netflix is still strong, HBO Max/Discovery could be a hit, and the Amazon and Apple behemoths can outspend Disney with the spare change in their couch cushions.

  3. Donald Melvin January 11, 2022

    1.Will they also merge ESPN + with Disney + Hulu if the two merged 2.where would all the non Disney content go cause their is still contracts from Warnermedia (Warner Bros Discovery in 2022), NBC Universal (until 2022 or 2024) and other studios