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.