Commentary
Hulu Leaving Disney? That May Be The Right Call For Disney
- by Wayne Friedman , Staff Writer, April 12, 2023
The more one thinks about Hulu, the more likely it seems that returning Chief Executive Officer of Walt Disney Bob Iger might decide to sell it.
The longtime premium streaming service -- which started up in 2007, and has had both ad-supported options and subscriber-fee only options -- could be seeing its days numbered at Walt Disney.
Recently, Iger has said Hulu's programming is “undifferentiated... before we make any big decisions about our level of investment, our commitment to that business, we want to understand where it could go.”
Here's why, we believe: The competitive landscape for broad-based advertising-supported services -- which includes Hulu -- is entering an increasingly difficult stretch.
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And in addition, the marketplace is maturing -- with the probability of a looming recession, according to many analysts.
Walt Disney is probably not all that happy being in this bigger space, where the lesser original premium-content platforms -- Tubi, Pluto TV, Roku Channel and others -- live. All are competing for the same advertising dollars.
Now, to be sure, Hulu has plenty of original programming content. But it could be in a difficult race with Netflix that has accelerated its content spend.
Hulu still delivers one episode a week at a time -- just like Disney+.
On the other end of things, it has tons of library content. But so does Tubi, Pluto TV, and the Roku Channel. The question is -- Does Hulu have enough differentiation with those services?
It seems Hulu is in no-man's land: Not quite Netflix or Amazon Prime Video. But with a better profile, more premium content than Tubi, Pluto TV, and Roku.
So what to do? Sell it -- or invest in it. For the latter option, Disney would need to completely revamp or re-haul the service.
Marketing for Hulu in recent months tells us that “Hulu has Live Sports”, “Hulu has Movies” and “Hulu has Comedy.”
All good. But is that enough to move the streaming needle?
Michael Morris, media analyst of Guggenheim Securities, wonders -- What does a "curated" general entertainment service look like financially?” He says this question -- and others -- remain open items and are unlikely to be resolved in the coming months.
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
Sounds like Iger may be setting himself up for a big mistake---- like CBS did years ago when it owned the New York Yankees but didn't know what to do with the team---so it sold the Yankees to George Steinbrunner for a paltry $10 million--and look what happened to the Yankees value-wise after they were dumped. So what, if Hulu's content is "undifferentiated"? Hulu is big---it attains viewership that is almost half as large as Netflix in the U.S. ---mostly with "undifferentiated" fare. Why not find a way to let Hulu find its natural subscriber level---even if its lower than now---- and cut back on "originals" so it can operate profitably? And what's so bad about competing not only with Roku, Tubi, Pluto,etc but also with Paramount+, Peacock, Amazon, etc.for ad dollars?A major shakeout of streaming services seems in the offing as there are too many contenders for not enough viewing time. With a better run Hulu in his stable, along with Disney+ and the ABC TV network plus its station and cable assets, Iger might wind up like George Steinbrunner---without Hulu, who knows?