Controlling Hulu, Disney Plots A Synergized Path Forward

Disney only struck a deal to take full operational control of Hulu this week, but the company already has plans for what it wants to do with the streaming service.

Disney inked a major deal with Comcast on Tuesday, securing operational control in exchange for buying out Comcast’s share in five years and an expanded program licensing agreement.

Disney CEO Bob Iger, speaking at a conference shortly after the deal was announced at the MoffettNathanson Media & Communications Summit, elaborated on plans.

For starters, Disney will eventually move Hulu from its own tech stack, to Disney’s BAMTech platform. Most significant, Disney will benefit from the direct customer relationship, as well as synergies with existing businesses.



“We will be able to manage customers cross all platforms,” Iger said. “Customer data, of course, password, username, billing. It gives us the ability to bundle and share data. Ad sales is another benefit to all of this, because we can integrate with our ad sales across other platforms.”

Disney will also be able to bundle Disney+, Hulu and ESPN+ together, potentially offering all three at a discount.

Then there is the content.

Iger told attendees the company was excited to “leverage the content engines that the company has,” noting that its film and TV studios can increase output beyond what is needed for linear channels.

“At FX, they have the ability to produce for more than just their channel. We will immediately get to work with FX to develop content for the Hulu platform,” Iger said. “The same could be said for ABC or ABC News.”

FX CEO John Landgraf, speaking to reporters at a Disney press conference earlier this week, suggested he sees Hulu as an opportunity to expand the FX brand. While the company now has 15 original series on its linear channels, it is tough to expand in linear TV today.

“It is hard to increase investment in programming when you are in a system that is flat, where you re not investing in acquiring subscribers, and nobody is really acquiring new subscribers within the MVPD system right now,” Landgraf said.

Landgraf also expressed enthusiasm about FX programming being widely available on a platform like Hulu, which has an ad-free option.

“There its a lot to be worked out with the announcement of Disney taking control of Hulu, I don’t have the answers to the questions for how that is going to work, but if you just think about the fact that 40% of its subscribers are ad-free, that is really exciting,” he said.

Ultimately, the deal allows Disney to forge one cohesive identity for Hulu, in much the same way as it is doing for Disney+ and ESPN+. Hulu will have a vast library of acquired shows, news programming, and adult-themed originals from Disney brands like Marvel and FX.

Putting those brands front and center is important, he argued.

“Imagine going into a supermarket and not seeing any brands, where everything is generic. How long would it take you to find toothpaste?” Landgraf said. “Brands are really valuable, particularly when you are in a really large retail or consumer environment.”

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