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


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  1. 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.


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