Disney’s Merger with Fox Will Give Them 60% of Hulu Streaming Service

By James DeRuvo (doddleNEWS)

One unexpected benefit of Disney’s purchase of 21st Century Fox, is that the Mouse House will now control over 60% of Hulu’s streaming service. And that makes us wonder, could Hulu is the launching point for Disney’s trio of streaming services?

“Hulu is a major asset that could propel Disney’s streaming machine,” Daniel Ives, an analyst for GBH Insights, said in a research report. “The acquisition of the Fox entertainment assets and a controlling stake of Hulu would make Disney a much more formidable and dangerous competitor down the road on streaming.”

Currently, Hulu is a partnership between Fox, Disney, and Comcast, each owning a 30% stake in the business, with the remaining 10% owned by Time Warner. Should the FCC approve the Disney-Fox deal, that would give Disney a 60% controlling interest, and allow them to utilize Hulu’s membership base to launch their Marvel and Star Wars streaming service, as well as their Disney themed and sports streaming initiatives.

“What we envisioned is actually taking Hulu and making it basically the home of adult programming where the ABC product would go, where the FX product would go, where the output of the studios that was not branded Disney, Marvel, Pixar, et cetera would go.” – Bob Iger

Course, what if Hulu actually changes the game? I’m thinking that Disney is going to want to keep Hulu around and beef it up to be the Netflix killer that everyone has been waiting for. With Hulu as the central hub, Disney could have a master streaming service, and then have add-on channel packages for Star Wars, Marvel, ESPN and the like. You don’t really need three streaming services, just add channels, much like Amazon does.

But as Iger says above, they could just let Hulu be it’s own entity, which could run all the more adult oriented films like Deadpool and TV shows like The Handmade’s Tale, Fargo and The Simpsons. Let’s face it, you’re not going to see a Deadpool character in Disney Parks anytime soon.

But even if Disney just adds Hulu to their wheelhouse of streaming media services and keep it on its own, I can see many users bolting from Netflix or Amazon should Disney make Hulu the competitor it’s always wanted to be. And to truly have the freedom to do what he wants, Disney Chief Bob Iger would likely have to whip out the check book once again and buy out both Comcast and Time Warner of the remaining stake.

This may prove problematic though, considering the rivalry that has traditionally existed between Universal and Disney. I rather doubt they’ll want to ceed a huge controlling stake in the streaming business to the mouse house with a simple check.

Disney would also have to spend more on original programming to play catch up with Netflix, which already spends close to eight billion dollars annually for shows like Stranger Things, House of Cards, The Crown and Marvel’s Hell’s Kitchen saga that includes Jessica Jones, Luke Cage, and the Punisher. Hulu, by contrast, only spends around $2.5 Billion. But when you toss in the massive libraries that Disney now controls with Fox and it’s own catalog, and the advantage suddenly tips in their favor.

Whatever Disney’s long term plans are, it all hinges on FCC approval.  They may decide that for the deal to go through, Disney would have to sell off their stake or be a silent partner like Comcast was forced to be after their acquisition of NBC Universal. Or, the FCC could say no to the merger altogether, like they were looking to do with Comcast and Time Warner. If that is the case, well, we’re back to where we are now. Disney having their three streaming services and Hulu just being the little guy.

Hat Tip – LA Times




About James DeRuvo 801 Articles
Editor in Chief at doddleNEWS. James has been a writer and editor at doddleNEWS for nearly a decade. As a producer/director/writer James won a Telly Award in 2005 for his Short Film "Searching for Inspiration. James is a recovering talk show producer from KABC in Los Angeles, and a weekly guest on the Digital Production Buzz with Larry Jordan.

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