In a bid to streamline its digital video business, it seems Disney intends to focus on optimizing Disney+ while selling off its share in Hulu to co-owner Comcast in 2024. For advertisers, this may mean worsening Hulu ad products, as telcos typically struggle to make digital media businesses work.
All streaming services, even the biggest ones, have a hard time making the #streamingvideo business commercially viable.
@Disney is a case in point. So expensive is content production, so costly the streaming itself, so hard to scale the infrastructure, that its new/old boss @RobertIger had to increase subscription prices to @DisneyPlus by 38%, from $7.99 to $11.99 per month.
Generally, Iger wants to streamline the video business. One key question is what will happen to @Hulu. Hulu is two-thirds owned by Disney, with the remaining third being owned by cable giant Comcast. In 2024, the current agreement with Comcast runs out, at which point Iger must decide whether to buy the remaining third or sell Disney’s two thirds to Comcast- which has made noises that it would be willing to take them off Disney’s hands.
Hulu sits somewhat awkwardly next to the giant-to-be, Disney+, with few synergies, if any. As a business with around $3B in ad sales it was the biggest streamer in 2022 -bigger than even @YouTube on TV screens. But its revenue growth is slow and slowing, in a segment that is rocketing skywards. It also features more general entertainment versus Disney+’s famous-franchise content and addresses an older demographic than Disney+. That is as opposed to Iger’s declared goals to focus more on popular franchises, to avoid “undifferentiated” content, and to tap into younger audiences.
He also said that Disney would not enter an arms race for the greatest number of subscribers, so Hulu’s 47 million might not move the needle in Hulu’s favor, especially when there is no integration and cross-promotion beyond bundled deals. Disney might even choose to let competing streaming services distribute its content for extra revenue, another sign Iger is prepared to slaughter some sacred cows to optimize the business.
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