There are still no real answers to the question of Hulu’s fate, but Disney CEO Bob Igar has said that his company is continuing to evaluate the best options for the streaming platform in a “very tricky” market environment as the company wants “to understand where it (the market situation) could go.”
Speaking at the Morgan Stanley Tech, Media and Telecom conference, Iger said: “What we’re doing right now — because we own two-thirds of Hulu, and we have an agreement with Comcast that may result in us owning 100 percent — is we’re really studying the business very, very carefully, all those competitive dynamics with an understanding that we have a good platform in Hulu.”
During the discussion, Igar said that while Hulu is a strong platform, it is one that features “undifferentiated” entertainment content, compared to what he sees as the highly differentiated content on Disney+. The returning Disney CEO has repeatedly said that his company will continue to prioritise the growth of Disney+.
Going back to Hulu’s strong suits, Igar said: “We have very strong original programming, actually highly awarded original programming, some delivered by FX, which is a great not only producer but brand, and we also have a good library, so it’s a solid platform. And it’s also a very attractive platform for advertisers. It’s already proven to be valuable for them and advertising is proven to be valuable for us.
“But the environment is very, very tricky right now and before we make any big decisions about our level of investment, our commitment to that business, we want to understand where it could go,” he said, not giving away his company’s future plans for Hulu.
Iger said that his company remains “extremely bullish” about Disney’s streaming potential, notably Disney+. To turn the sector profitable, the business will look to “figure out a pricing strategy that makes sense” the platform, which Iger said may entail taking a closer look at promotional pricing and free trials.
“In our zeal to grow global subs, I think we were off in terms of that pricing strategy. And we’re now starting to learn more about it and to adjust accordingly,” he said. Igar also mentioned the recently introduced advertising tier on Disney+, describing it as “an advertiser’s delight”. He said that it had given the brand and audience engagement and shown the company the likelihood of further subscriber growth.
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In another development about Hulu’s fate, it is being said that Disney has recruited Goldman Sachs to explore strategic options for its stake in the streaming platform, which may include a sale. Currently, Disney has the majority stake in Hulu and is running the platform, Comcast on the other hand has a 33% stake in the streaming platform.
A 2019 put-call agreement between the two companies states that Comcast may use the option to force Disney to buy off its stake in Hulu in January 2024, on the other hand, Disney can use the same agreement to force Comcast to sell its holding. The terms of the agreement state that both companies need to get the platform evaluated independently and it is being reported that Hulu is currently valued at a minimum price of $27.5 billion, implying that Comcast’s one-third stake would cost at least $9 billion.
However, both companies have been cagey when it comes to telling the world what they intend to do with Hulu. Previously, Comcast President Mike Cavanagh stated that his company will consider all possibilities, including selling their share to anybody willing to pay more than what the company’s assessed value of the stake is. He did, however, state that his organisation is “very happy” with the 2019 arrangement with Disney and will only “consider things” if a better offer comes up.
In February, Disney’s Igar had said that his company may actually sell its majority share in Hulu instead of spending billions on buying out Comcast’s share in the streaming platform, however, he did add that “all options are on the table.”
Comcast CEO Brian Roberts has also shown an interest in acquiring Hulu altogether, however many saw his remarks about wanting to purchase the streaming platform as a manoeuvre to increase the value of his company’s stock.
Only Yesterday, it was announced that Comcast has pulled Saturday Night Live and other NBCUniversal shows from Hulu and rerouted them to Peacock. The shift will formally come into place in September.
Hulu, which solely runs in the United States, had 48 million customers as of the end of 2022, with 4.5 million on Hulu + Live TV and the remainder on the on-demand version. If you want to see what the hype for the streaming platform is all about here’s a list of the best shows on Hulu and the way to stream them on Hulu outside US.
