Disney is set to combine the content from Hulu and Disney+ into a single streaming app in the United States, according to an announcement made by CEO Bob Iger on Wednesday.
The new app is expected to be rolled out by the end of the year, initially being available to subscribers who have signed up for both services.
While Disney will continue to offer Disney+, Hulu, and ESPN+ as standalone options, the integration of the two platforms is seen as a logical progression of Disney’s direct-to-consumer offerings. Iger believes that this move will provide greater opportunities for advertisers and offer bundle subscribers access to a more extensive and streamlined content library. The goal is to enhance audience engagement and create a more cohesive streaming experience.
The combination of Hulu’s general entertainment content with the content available on Disney+ is seen as a strong combination from multiple perspectives. It is expected to attract and retain subscribers, as well as provide advertisers with increased potential for reaching a larger audience. The move comes after careful consideration of the business potential and a reevaluation of Disney’s approach to Hulu’s future.
Disney currently holds the majority stake in Hulu, with Comcast owning one-third. The company has the option to purchase Comcast’s stake, or Comcast can require Disney to buy it, starting in January 2024. The details of Disney’s acquisition of Comcast’s stake are still being determined, and conversations between the two companies have been described as cordial.
Read more: Best Disney+ Movies to Watch on a Rainy Day, Ranked
Previously, Iger had expressed a willingness to consider parting with Hulu, stating that “everything was on the table.” However, after further study and evaluation, he now sees the value in retaining Hulu’s general entertainment content in combination with Disney’s offerings. The original programming and advertising potential of Hulu are seen as valuable assets that contribute to a solid platform.
Hulu has been a successful venture for Disney, generating higher revenue per user compared to its other streaming services. In the first quarter, Hulu’s average monthly revenue per paid subscriber decreased slightly, primarily due to lower advertising revenue and a higher mix of subscribers to multi-product offerings. However, the live TV and SVOD package showed growth in average monthly revenue per paid subscriber.
While Hulu’s number of paid subscribers remained relatively stable, Disney+ experienced a slight decline in domestic subscriber numbers. Despite this, the integration of Hulu and Disney+ is expected to strengthen the overall streaming service and provide a more comprehensive offering for consumers.
In the coming months, Disney plans to increase prices on the ad-free tier of Hulu to better reflect the value of its content offerings. This move follows a successful price increase implemented earlier. Although Hulu’s operating income was affected by increased programming and production costs and lower advertising revenue in the first quarter, subscription revenue growth and lower marketing costs partially offset these factors.
Read more: Every Official Disney Princesses, Ranked
Overall, Disney’s decision to combine Hulu and Disney+ into one app reflects the company’s strategy to provide a unified streaming experience, leverage advertising potential, and enhance subscriber engagement. By integrating the content from both platforms, Disney aims to offer a more robust and attractive streaming service to its audience in the United States.
