Disney Takes Over Hulu From Comcast As Stream Wars Heat Up

Disney is taking full control of Hulu from Comcast, as both companies prepare to launch ir own streaming services in response to declining audiences for traditional TV. 

companies said Tuesday that Comcast, which owns a third of Hulu, can sell its stake to Disney starting in 2024, for a minimum of $5.8 billion. Until n, Comcast will be a silent investor. 

Hulu launched more than a decade ago as major entertainment companies dealt with rise of digital media. While YouTube became a home for digital video, Netflix built up a streaming library of back seasons of popular TV shows and movies, and Hulu made TV episodes from networks such as ABC, NBC and Fox available online after y aired on TV. 

Hulu today still shows network TV episodes and original series for $6 a month. It has a newer, cable-like service with live TV channels for $45 a month. 

In past few years, many or streaming services have emerged, helping more people drop ir cable subscriptions. se include ones from AT&T and Google that, like Hulu’s live-TV service, compete with traditional cable bundle. Ors are more focused, like HBO w. 

Meanwhile, big media companies that own TV networks are looking to launch still more streaming services as a way to make up for revenue lost from fewer cable subscriptions. 

Disney’s deal with Comcast isn’t surprising. Disney had already become majority owner of Hulu when it absorbed Fox’s stake as part of its purchase of Fox’s entertainment businesses . 

Having total control of Hulu gives Disney more power to support its own streaming efforts. company is launching a new kids-focused streaming service called Disney Plus this year for $7 a month and is likely to offer discounted bundles with Hulu and its sports service, ESPN Plus. 

Meanwhile, Comcast’s NBCUniversal will debut a streaming service in 2020. And AT&T’s WarnerMedia is launching its own streaming service, with a focus on HBO and or shows and movies owned by company. re’s also a new one from Apple, with original content. 

An aftereffect of all se new services could be fragmentation of content. You may have to pay for more streaming services to keep watching same stuff. 

Disney is planning to take back its library, which includes Pixar, Marvel and “Star Wars” movies, from Netflix for its own services. Or popular shows on Netflix, including “Friends” and “ Office,” are owned by big entertainment companies, and y may want to have m back for ir own services. AT&T CEO Randall Stephenson said at an investors conference Tuesday that company, which owns “Friends,” will be “bringing a lot of se media rights, licensing rights back to ourselves” for its streaming service. 

If entertainment companies pull shows from Hulu, Netflix or Amazon, however, y miss out on lucrative licensing revenue — a hard decision to make when ir own fledging services have to compete with so many ors. 

“I’m t firmly convinced that everyone going to pull all ir content off Netflix and put it behind ir walled garden,” said Brett Sappington, analyst for research firm Parks Associates. 

Doing so is risky, he said, because companies lose out on ar service marketing shows on ir behalf, as well as that guaranteed money. 

While Comcast has agreed to keep its NBCUniversal shows and networks on Hulu until late 2024, it can cut much of that deal off early, moving shows to its own streaming service in three years. In a year, its streaming service can also start offering video that’s currently exclusive on Hulu, sharing shows with Hulu for time being. 

“It’s a good hedge in terms of m being able to gauge wher ir own service needs its content,” Sappington said. 

He added that deal gives Comcast flexibility to figure out best way to make money off video it owns. 

Hulu’s ownership has contracted as a wave of mergers consolidated industry: Walt Disney Co. absorbed 21st Century Fox’s stake as it bought up Fox’s studio and many of its networks, while AT&T sold off share it inherited with purchase of Time Warner, w renamed WarnerMedia. 

AT&T’s sale valued unprofitable Hulu at $15 billion. agreement with Disney and Comcast values Hulu at a minimum of $27.5 billion in 2024. Disney has forecast that Hulu will turn a profit around n. 

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