Disney Takes Full Control Of Hulu, Ending Years Of Managerial Schizophrenia

from the adapt-or-perish dept

For years we've noted how as a product of the cable and broadcast industry, Hulu spent many years going out of its way to avoid being truly disruptive. Past owners 21st Century Fox, AT&T, Disney and Comcast/NBC spent a lot of time ensuring the service wasn't too interesting -- lest it cannibalize the company's legacy cable TV cash cow. As a result, Hulu spent a good chunk of the last decade stuck in a sort of existential purgatory, with a rotating crop of execs trying to skirt the line between giving consumers what they actually want, and being a glorified ad for traditional cable television.

As cable and broadcast executives slowly realized that cord cutting was a threat that wasn't going away, things began to shift. More recently, owners like 21st Century Fox and AT&T have headed to the exits to focus on their own streaming efforts. That exodus continued this week with Comcast announcing it would be giving up full operational control of Hulu to Disney effective immediately.

You might recall that Comcast was banned from meddling in Hulu management as a condition of its 2011 merger with NBC/Universal, with regulators worried that the company would attempt to undermine Hulu to protect its traditional cable TV revenues. Comcast being Comcast, the company largely ignored those conditions, one of several reasons regulators balked at its attempted acquisition of Time Warner Cable years later.

Under the terms of this new deal, Comcast has the option of selling its entire stake to Disney by 2024:

"Comcast also will be allowed to sell its 33% stake in Hulu to Disney in 2024 at a valuation of at least $27.5 billion, even if the streaming service is worth less, according to the agreement. Comcast is guaranteed at least $5.8 billion for its Hulu stake, according to the agreement.

As part of the deal, Disney has agreed to pay Comcast for its Hulu content for the next five years. NBC channels will be on Hulu Live at a higher rate than previously agreed. NBCUniversal, CNBC’s parent company, will also be able to run the same content on its own streaming service, which is expected to launch in next spring."

For the immediate future, this looks like a promising outcome for cord cutters. Hulu is finally freed from managers who really didn't much want the service to succeed because it might disrupt their own services. And while it's notably smaller than Netflix (137 million subscribers worldwide) and Amazon (100 million Prime subscribers), its 20 million-strong userbase puts it well ahead of numerous other emerging options like Dish's Sling TV and AT&T's DirecTV Now.

That said, the service isn't quite out of the woods yet. Researchers predict that every broadcaster in existence is likely to have its own streaming service on the market by 2022, and many of those companies will be eager to lock that content away in exclusivity silos, well away from competitors. And with Disney planning its own looming streaming service (Disney+) as a repository for its Star Wars, Marvel, Pixar, and kids programming, it's still possible that Disney eventually sees Hulu to be either redundant or a threat to those ambitions.

Filed Under: control, copyright, culture, piracy, streaming
Companies: comcast, disney, hulu


Reader Comments

Subscribe: RSS

View by: Time | Thread


  • icon
    Stephen T. Stone (profile), 15 May 2019 @ 1:48pm

    There is nothing wrong with your television set. Do not attempt to adjust the picture. We are controlling transmission. If we wish to make it louder, we will bring up the volume. If we wish to make it softer, we will tune it to a whisper. We will control the horizontal. We will control the vertical. We can roll the image; make it flutter. We can change the focus to a soft blur, or sharpen it to crystal clarity. For the rest of your life, sit quietly and we will control all that you see and hear. We repeat: There is nothing wrong with your television set. Your are about to experience the awe and mystery which reaches from the inner mind to The Disney Empire.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2019 @ 1:55pm

    it's still possible that Disney eventually sees Hulu to be either redundant or a threat to those ambitions.

    I have seen the suggestion that Hulu is where Disney could put videos that are not child friendly, and keep Disney for child friendly content, which does make sense.

    reply to this | link to this | view in chronology ]

  • icon
    aethercowboy (profile), 15 May 2019 @ 2:00pm

    I think you meant to call it "dissociative identity disorder" (aka "multiple personality disorder") and not "schizophrenia."

    When you have schizophrenia, you have a decreased ability to understand reality, which better describes the owners of Hulu, and not Hulu's management.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2019 @ 2:21pm

    Frankly, if I were Disney, I'd just put everything on Hulu, and scrap the separate Disney+ service. They're going to own about %100 of the company, it's an established brand, and established company/infrastructure.

    reply to this | link to this | view in chronology ]

    • icon
      crade (profile), 15 May 2019 @ 2:59pm

      Re:

      Disney has a huge advantage here.. Basically if everyone does Silo.. Disney has a monopoly on the most stuff, so they should be a clear winner.. Knowing Disney though, I predict they will overvalue the content, overprice the product, try to "balance" with their non streaming services / revenue, have too many restrictions too little content and basically screw up their change to dominate the streaming market..

      reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 16 May 2019 @ 12:17am

      Re:

      I'd assume there's a lot of legacy issues with Hulu, not least its 100% US focus vs a more international view for the new Disney stuff. Also, Disney are all about branding and I suspect there's stuff on Hulu they're happy to keep over there but would not be happy with if it became 100% associated with Disney in their mind. Most of the mainstream won't notice that it's a Disney product, as they still don't associate things like ESPN with them.

      reply to this | link to this | view in chronology ]

  • icon
    crade (profile), 15 May 2019 @ 2:51pm

    "For the immediate future, this looks like a promising outcome for cord cutters. Hulu is finally freed from managers who really didn't much want the service to succeed because it might disrupt their own services. "

    Ok but I'm not sure how you figure Disney doesn't fall into the same category. They already have so many other services in competition with Hulu it's not funny.. Then they are putting out Disney+ soon to pile it on.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2019 @ 2:58pm

    Hulu is a great service and will possibly topple Netflix at some point.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 May 2019 @ 3:31pm

      Re:

      If Hulu topples Netflix it will be because of Netflix's failure to provide content worth paying for, not because Hulu is such an awesome company. We have both and they're not even in the same market. Even if they were Hulu's cash grab with "Hulu + Live TV" and their dog crap [new!] user interface demonstrate nothing but poor management.

      The content on both sucks.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 16 May 2019 @ 1:18am

        Re: Re:

        Hulu is a great repository for television, films, news, and a lot of stuff, it's commercial-free for $12 a month, it tracks what I've watched, and its offerings have actually gotten better in the past year. I don't have to worry about when new episodes of shows I watch are out, and I can binge-watch classic shows I never got around to watching when they were on.

        It's the only streaming service I'll pay for. Netflix's "cutting-edge original content: is a joke. It's all done the same way, with the same B-level talent (or washed-up A-listers), with the same tone, marketed to the same audience. Hulu presents a lot of network television the morning after. In fact, in 45 minutes, all of last night's primetime (or most of it) will be available. I'd like to see the cast and writers go on twitter during this hour the way they do when the shows are on the networks, but we're not there yet. 5:00 a.m. is the new primetime.

        reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 16 May 2019 @ 12:18am

      Re:

      They'd have to start servicing places outside of the US for that to even become a possiblity.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2019 @ 2:58pm

    So, ironically due to extreme fragmentation/siloing in the streaming realm, the cable industry is saved by the very thing it feared

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 May 2019 @ 3:33pm

      Re:

      The fragmentation can't last. No consumer is going to subscribe to 27 different streaming services. Sooner or later, as each service goes broke, they'll come to realize that the original streaming model where studios license their content to a real streaming provider, was the correct one.

      reply to this | link to this | view in chronology ]

      • identicon
        Qwertygiy, 15 May 2019 @ 4:44pm

        Re: Re:

        It's no different than the music industry. You are going to struggle if you release your music only on CD, or only on Spotify, or only on iTunes, or only on whatever passes for MTV these days.

        The proper solution is to have some form of middle management. The more traditional way used in the music industry is having a label or agent that makes deals between all the services for many clients, so that each service has a copy of the client's product.

        The modern way used in the tech industry (i.e. email, cross-platform gaming, web browsing) is to have a central server that hosts the data and a protocol for different services to use to access that data. The services never obtain a full copy of the data themselves, they merely pass it on to the user. Hosting a website yourself is a lot cheaper than using a service like GoDaddy. Likewise, hosting your content yourself would be a lot cheaper than requiring a label to handle it all for you... and you would get users from every service.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 16 May 2019 @ 6:08am

    misnomer

    "cord cutters" - Ha!
    We gotta come up with a better term. Call them "cable cutters" since they're still paying Comcast, Spectrum, Cox, or whoever. The cord is still attached.
    All of these new 'streaming services' would only be truly disruptive if they also came with their own ISPs. Imagine being able to choose between Disney, AT&T (HBO), Amazon, Netflix, etc. as your ISP. Eventually this 'streaming' bubble will burst, and we'll be left with the oligopoly style that we're used to, but hopefully some additional ISPs (competition) will be the end result.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 16 May 2019 @ 7:32am

      Re: misnomer

      It would be beneficial for everyone if the content and platform owners were separate from the internet service providers.

      reply to this | link to this | view in chronology ]

      • icon
        PaulT (profile), 16 May 2019 @ 7:47am

        Re: Re: misnomer

        It would, he's just attempting a bit of argumentum ad absurdum.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 16 May 2019 @ 8:16am

          Re: Re: Re: misnomer

          Maybe the big ISPs will get busted, like the big cigarette companies did, and, as punishment, the big ISPs will have to fund municipal ISP set ups and maintenance -- similar to how big tobacco has to pay for those "Truth" ads.

          reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Close

Add A Reply

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Techdirt Gear
Shop Now: Copying Is Not Theft
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.