Disney’s Latest Move Raises Questions on Bob Iger’s Plan for Hulu

Disney is launching a combined Disney+ and Hulu offering, which makes it look like Disney will buy Comcast's stake of the streaming service. But there's still a price Disney is willing to sell for, experts say.

Bob Iger wears a suit and makes an inquisitive look.
Bob Iger wouldn’t confirm his Hulu plans despite rolling out a combined Hulu and Disney+ service. Getty Images

The Walt Disney Company (DIS) will launch a combined Disney+ and Hulu streaming offering later this year, CEO Bob Iger said on a call with analysts on May 10. Subscribers who pay for both platforms—starting at $10.99 for the existing bundle with ads—will be able to view all content within the Disney+ app. The company’s individual streaming platforms, including Disney+, ESPN+ and Hulu, will remain standalone options as well.

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“This is a logical progression of our (direct-to-consumer) offerings that will provide greater opportunities for advertisers while giving bundles of subscribers access to more robust and streamlined content,” Iger said on the call.

Television executives seem to be pushing a more unified streaming experience as the future of the industry. Iger’s announcement comes on the heels of Warner Bros. Discovery merging its HBO Max and Discovery+ platforms. Last year, Paramount+ began offering an in-app bundle with Showtime, bringing all content under one roof.

Disney’s move also raises questions about the future of Hulu. Disney has a two-thirds stake in Hulu, and Comcast (CMCSA) owns one-third. Come early 2024, Comcast will have the option to sell its portion to Disney, and Disney could force the sale as well. Disney could also sell Hulu altogether. Though the integration makes it look as though Iger made up his mind about buying Comcast’s share of Hulu—as Barclays analyst Kannan Venkateshwar pointed out in the call—Iger wouldn’t confirm it. He only said the Disney+ offerings alongside the general entertainment Hulu provides is a “strong combination” for both subscribers and advertisers.

“Why would he tell analysts what he’s doing when he’s in the middle of negotiating?” said Paul Hardart, director of the entertainment, media and technology program at New York University’s business school. “From a negotiating standpoint, it’s smart to say, ‘this thing has value to us and we don’t need to sell it.’ Therefore, if Comcast wants it, the price goes up,” he told Observer.

The original 2019 deal set Hulu’s floor price at $27.5 billion, meaning Comcast’s 33 percent stake would cost Disney $9.17 billion, though it could be worth more now. Buying the platform from Disney would cost Comcast at least $18.3 billion.

“It’s easy to assume (Iger) is tacitly saying they’re keeping Hulu, but my hunch is that Comcast could still buy it,” Hardart told Observer. “There’s a price Disney would sell Hulu for.” It is unclear what would happen to the combined Disney+ and Hulu option if Disney were to sell its stakes.

Owning the entirety of Hulu could be a welcome addition to Comcast’s streaming business, as Peacock struggles to compete with the biggest platforms, Hardart said. Peacock advertises itself as the “most complete” streaming service, and like most platforms, it hasn’t yet turned a profit. Though Peacock’s revenue and subscriber count is increasing, its losses are as well, according to company financial documents. But Comcast will likely sell its stake to Disney, CEO Brian Roberts said at the SVB MoffettNathanson conference today (May 16).

What will the Disney+ and Hulu combined platform look like?

The merged catalog will offer 4,780 titles—2,245 television shows and 2,535 movies—according to data shared with Observer by Reelgood, a streaming aggregator. Its television show load will be bolstered by Hulu’s archive, which is three times the size of Disney+’s. The individual services have roughly the same number of movies.

The new Disney+ combined catalog creeps up on the size of Netflix’s, which offers 5,087 titles in the U.S. It isn’t clear how many shows and movies will appear on Max, the new HBO Max and Discovery+ merged platform that launches May 23. Reports from 2021 suggest it could be 7,800, but the platforms have removed some content since then.

The merged offering can help Disney buttress its subscriber numbers, said Hardart. Families with kids are expected to have Disney+, he said, and adding in adult shows Hulu offers like reality television or the FX offerings “make it incredibly competitive.”

Charts of the catalog genres for Disney+, Hulu and the combined service are displayed in green.
Hulu’s most prominent genre is drama, while that of Disney+ is action and adventure. Reelgood

The drama genre will be the most represented in the new Disney+ offering, with 38 percent of titles falling under this category, according to Reelgood data. Drama dominates nearly half of Hulu’s catalog. The combined service will also feature prominent action and adventure, comedy and documentary categories.

Disney’s Latest Move Raises Questions on Bob Iger’s Plan for Hulu