Disney can “greatly accelerate” its push into the direct-to-consumer space and flow “more content” towards the streamer, while “managing Hulu becomes just a little bit more clear,” says Bob Iger.
The Walt Disney Co.
has agreed to acquire Fox’s stake in Hulu, giving it majority ownership of the streaming service, as part of the $52.4 billion purchase of the Rupert Murdoch-owned media company’s assets.Under the deal, Disney will add Fox’s 30 percent stake to its own stake of the same size. Comcast/NBCUniversal and Time Warner currently own 30 percent and 10 percent stakes in the business, respectively.
Disney is expected to take advantage of its majority ownership by leveraging Hulu’s streaming technology and existing subscriber base as it prepares to launch two new over-the-top businesses — one for IP from Star Wars, Marvel and Pixar and another for streaming sports — in the next two years.
“Hulu obviously is a great opportunity to expand in the direct-to-consumer space,” Disney chairman and CEO Bob Iger said on a call about the transaction. “Owning roughly a third of it was great, but having control of it will enable us to greatly accelerate Hulu into that space and become an even more viable competitor to those that are already out there.”
He added: “We will be able to do that not only by flowing more content in Hulu’s direction, but by essentially having control to the extent that managing Hulu becomes just a little bit more clear, a little bit more efficient, a little bit more effective with a controlling shareholder.
”The Disney boss said the company will after the deal have a chance to offer several streaming services focused on different audiences, with Hulu likely to be positioned as a more adult oriented service, compared with a planned ESPN sports service and a planned Disney family service.
Iger also highlighted that Hulu has boosted its spending on original and acquired content, but wasn’t willing to immediately say whether the original programming budget could further increase once Disney takes a controlling stake.
The Disney CEO reiterated past comments on Thursday that the company is pushing into direct-to-consumer offers more aggressively while continuing to offer its content in the traditional pay TV ecosystem. But if that ends up facing majors challenges amid cord cutting or so, Iger said could simply adjust its strategy and “flip a switch” to focus even more on the direct-to-consumer space.
Even before the deal announcement, Wall Street observers suggested there would be benefits for Disney. “Owning a second major studio [after the Fox deal] could help Disney build out its OTT platform due to launch in 2019 with more content, and owning a majority stake in Hulu would give Disney control of this SVOD service as well as a potentially large virtual bundle…
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