What the acquisition of Hulu by Disney means

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After the acquisition of 21st Century Fox, and despite the release of Disney +, Disney will have complete control over one of Netflix's biggest competitors.

What the acquisition of Hulu by Disney means

According to an article published in January 2019 by PC Magazine, the two largest streaming video platforms of the moment are Netflix (with approximately 137 million subscribers) and Hulu (with approximately 25 million subscribers).

Leer en español: Lo que significa la adquisición de Hulu por Disney

The abrupt difference in the number of subscribers comes from the fact that Hulu is only available in the United States so it might be fairer to limit the comparison in relation to the number of US subscribers. According to Dazeinfo, at least until December 2018, Netflix had approximately 60 million US subscribers, which is more than double that of Hulu.

However, it should be noted that , according to a report published by Hulu in January 2019, its number of subscribers increased by 48% from one year to another and, therefore, it is foreseeable that in the near future this platform will be capable of to compete with Netflix, at least in the United States. This possibility tends towards an increasingly closer reality since May 14 when The Walt Disney Company announced the plan to acquire the entire Hulu from at least 2024.

Read also: Disney buys 21st Century Fox: a monopoly on entertainment?

It should be remembered that Hulu's financial outlook was very different in January 2019. At that time, the company was owned by multiple companies: The Walt Disney Company (30%), 21st Century Fox (30%), Comcast (30%) and AT & T (10%). After the acquisition of 21st Century Fox by Disney in March, this company went on to own 60% of Hulu. In addition, in April AT & T sold its shares to both Disney and Comcast based on its purchase of Time Warner, gaining control of HBO and its streaming platform.

In this way, Disney and Comcast turned out to be the only companies that own Hulu, with 67% and 33% respectively. Now, after the announcement of May 14, it is known that Comcast and Disney agreed that the latter company can buy 33% of the shares belonging to the first company at any time after 2024. According to a report by Forbes, Disney will acquire Comcast shares at least US $ 27.5 billion, depending on Hulu's valuation at the time of purchase.

Disney prepares to master streaming

The acquisition of the entire Hulu puts Disney in a strong position in the streaming platform business. It is known that on November 12, they will launch their platform entitled Disney + which, according to Bob Iger, executive president of The Walt Disney Company, will focus on family content. Iger also highlighted the fact that the acquisition of Hulu corresponds to the third stage of the company's streaming strategy.

In addition to Disney +, the company will use Hulu to store non-family content and ESPN + for sports content. In this way, with the diversification of content between these three streaming platforms owned by the same company, Disney expects to have greater control of consumer entertainment experience. For example, Iger proposed during the MoffettNathanson Media & Communications Summit that took place in New York on May 14th the possibility that the consumer can have a single password for all three platforms, receive a single invoice or even be able to buy Programming packages according to your interests.

Through the acquisition of Hulu and the launch of Disney +, Disney will have the means to benefit directly by streaming its contents. So far, the company has received profits only from the sale of licenses so that platforms such as Netflix can store Disney content, but it is expected after the release of Disney +, Netflix will lose access to movies and series produced by Disney, giving this company something of advantage in the financial war of streaming platforms.


LatinAmerican Post | Juan Diego Bogotá

Translated from "Lo que significa la adquisición de Hulu por Disney"