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May 15, 2019,   10:12 AM

Disney’s Bob Iger Explains Why Gaining Full Operational Control Of Hulu Advances The Entertainment Giant’s Streaming Strategy

Dawn Chmielewski

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Bob Iger, Walt Disney CEO (Credit: Josh Hallett/Flickr)

The Walt Disney Co. expects to expand the original programming on Hulu and explore packages designed to entice new subscribers, now that it has assumed full operational control of the streaming service.

Chief executive Bob Iger talked about the benefits of Disney’s newly announced agreement with Comcast Tuesday, in which the Philadelphia-based media company agreed to sell its 33% stake in Hulu as early as January 2024.

Comcast is guaranteed at least $5.8 million for its interest in the streaming service.

Iger said Hulu represents the third prong of Disney’s streaming strategy, with the adult-focused service augmenting the company’s other direct-to-consumer offerings—the sports-focused ESPN+ and the forthcoming family-focused Disney+, which is scheduled to launch this fall.

Disney will be able to better manage the consumer experience across these three services, whether it’s allowing consumers to use the same password or billing information, say, or to purchase programming bundles, Iger said in remarks made Tuesday during the MoffettNathanson Media & Communications Summit in New York.  

The just-announced deal, in which Comcast agreed to keep NBC network programs on Hulu for at least the next three years, will have tangible benefits for Hulu’s 28 million subscribers in terms of original programming.

“We will immediately get to work with FX producing content for the Hulu platform,” Iger said.

Disney plans to integrate Hulu into its ad sales business, giving media buyers the opportunity to purchase ads on television as well as digital platforms. All three of Disney’s streaming services will share a common underlying technology, BAMtech.

The Burbank entertainment colossus acquired a controlling interest in Hulu in March, when it closed its $71.3 billion purchase of 21st Century Fox’s film and television assets—and assumed a 30% stake in the service.

It seemed inevitable that Comcast would sell its one-third interest in the joint venture once AT&T shed its 9.5% interest in the streaming service in April.

Under terms of the agreement, Comcast has the option of continuing to invest in Hulu’s programming and technology. If the cable giant elects not to do so, its equity stake in the streaming service will be diminished to no less than 21%.

Comcast also obtained the right to offer its NBC programming on its own ad-supported streaming service, which is expected to launch next spring.



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