Disney Announces Streaming Service Overhaul: Disney+ and Hulu Content to Merge in a Single App

KEY TAKEAWAYS
Unified Streaming App: Disney plans to combine content from Disney+ and Hulu into a single app for the US market by the end of 2023. This move aims to streamline the streaming experience for consumers and create new advertising opportunities.
Future of Hulu: Disney's majority ownership of Hulu raises questions about the future of Comcast's stake in the company. The potential full acquisition of Hulu by Disney will shape the direction of the unified streaming platform.
Financial Implications and Advertising: Consolidating content from Disney+ and Hulu could enhance advertising potential. Disney plans to increase prices on its ad-free tier and sees value in combining Disney's family-friendly content with Hulu's more adult-oriented offerings.
Subscriber Numbers: While Hulu's revenue per user is higher than other Disney streaming services, its subscriber count has remained flat. In comparison, Disney+ has seen domestic subscriber numbers surpass Hulu.
Pricing and International Expansion: Details about the pricing for the consolidated app have not been revealed yet. Outside the US, Hulu shows and movies are only accessible through Disney+. The unified app is expected to strengthen Disney's international streaming presence.

 

In a bid to streamline the digital entertainment landscape, Disney CEO Bob Iger announced plans to combine content from Disney+ and Hulu into one app for the US market by the end of 2023.

The move aims to unify the streaming experience and provide greater opportunities for advertisers, while also enhancing consumer convenience for those subscribed to both services.

A Step Toward Unified Streaming

This strategic decision represents a significant development in the direct-to-consumer (DTC) space.

The proposed app will integrate content from Disney+, Hulu, and ESPN+, eliminating the need for multiple subscriptions and separate logins.

However, the standalone subscription options for these platforms will continue to exist, offering flexibility to the consumers.

The SVOD and live TV package from Hulu has seen an increase in average monthly revenue per paid subscriber from $87.90 a year ago to $92.32.

Anticipating the Future of Hulu

Despite Disney’s majority ownership of Hulu, the future of Comcast’s stake in the company is yet to be determined.

The telecommunications giant currently owns a third of Hulu, but has the option to compel Disney to purchase its stake from January 2024.

Similarly, Disney holds a buy option to force Comcast to sell its stake.

The potential full acquisition of Hulu by Disney will further shape the future of the unified streaming platform.

This announcement reflects a change in Disney’s earlier stance towards Hulu, with previous signals suggesting a willingness to part with the general entertainment platform.

The shift comes after a comprehensive analysis of the business potential and the realization of the benefits of combining Disney’s family-friendly content with Hulu’s more adult-oriented offerings.

Financial Implications and Advertiser Opportunities

Hulu’s subscription video on demand (SVOD) platform has been generating more revenue per user than any other Disney streaming service, despite a decline in segment results in the first quarter.

The consolidation of content could bolster advertising potential, with Iger expressing excitement over the prospects of the combined platform.

Disney also plans to increase prices on its ad-free tier later this year, a move seen as a reflection of the value of the company’s content offerings.

The SVOD and live TV package from Hulu has seen an increase in average monthly revenue per paid subscriber from $87.90 a year ago to $92.32.

However, the subscriber count for Hulu has remained flat year-over-year, with numbers standing at 48.2 million in the three months ended April 1, a slight increase from the 48 million a year ago. In comparison, Disney+’s domestic subscriber numbers stood at 46.3 million.

Pricing and International Expansion

While the announcement has created a buzz, the company has yet to reveal the pricing details for the forthcoming consolidated app.

As of now, a Disney+ and Hulu bundle with ads costs $9.99 per month, while an ad-tier Disney+, ESPN, and Hulu bundle is $12.99/month.

A bundle including all three wherein Disney+ and Hulu are ad-free comes at $19.99 monthly.

Outside the U.S., Hulu shows and movies are only viewable through Disney+. For example, in the United Kingdom, Hulu isn’t available as a separate app and a subset of the brand’s offerings can be found in the Star tab within the Disney+ interface.

The new unified app is anticipated to enhance the global reach of Disney’s diverse content, strengthening its position in the international streaming market.

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