Slowly but surely, Disney has been increasing its ownership stake in Hulu and now has come to the point where it has full control of the video-streaming service through a deal with Comcast.
Variety reports today that the Mickey Mouse house and Comcast just announced a deal under which Disney will assume “full operational control” of Hulu, effective immediately. Within five years, Comcast has agreed to sell its Hulu stake to Disney for at least $5.8 billion, the report notes. As result, Disney is now the “only one with its hands on Hulu’s steering wheel.”
Here’s an excerpt from the story:
Under the deal, Comcast’s NBCUniversal will continue to license content to Hulu through late 2024. However, as soon as next year, NBCU will have the right to pull back programming previously licensed exclusively to Hulu (continuing to make it available to Hulu on a nonexclusive basis for a reduced licensing fee). And by 2022, NBCUniversal will have the right to cancel most of its content-licensing agreements with Hulu. NBCU is planning to launch a free, ad-supported streaming service next year.
Make no mistake about it, this is about the Great Streaming Battle that lies ahead. With full control over Hulu, Disney is going to plug Hulu into its upcoming streaming service.
Disney’s boss and Apple board member Bob Iger commented:
We are now able to completely integrate Hulu into our direct-to-consumer business and leverage the full power of The Walt Disney Company’s brands and creative engines to make the service even more compelling and a greater value for consumers.
Disney could even launch Hulu internationally. Just a few weeks ago, AT&T sold its 9.5 percent stake in Hulu to Disney and NBCUniversal for $1.43 billion, valuing Hulu at $15 billion and increasing Disney’s stake in the streaming service to 66 percent.
Comcast/NBCU will retain its 33 percent ownership interest in Hulu. As early as January 2024, Comcast can require Disney to buy NBCU’s interest in Hulu. By the same token, Disney can require NBCU to sell its interest to Disney for its fair market value at that time, the companies announced Tuesday.
There’s just no stopping Disney.
If I were Netflix, I’d be terribly worried even though they’re trying to act like this is business as usual. Aside from the fact that there’s plenty of money in the Disney coffers, no one’s come close to acquiring prized assets, like Star Wars, Marvel, Pixar and 21st Century Fox.
On top of that, Disney has its own incredibly rich library of family-friendly content.
Disney’s go-to market strategy couldn’t be clearer: undercut everyone.
Its streaming thing, Disney+, will cost just seven bucks per month and they plan to be in all the major world regions within the next two years. On top of that, Netflix can no longer piggy-back on some of Disney’s content as the company has pulled Star Wars from Netflix.
And if you’ve been wondering why the heck all the major movie titles sold on iTunes Store have been upgraded to 4K HDR at no additional charge except for the Star Wars movies (they’re still in 1080p), now you know why.
This article was originally posted here