Disney Takes Full Control of Hulu in Deal with Comcast

Disney Assumes Full Control of Hulu in Deal With Comcast

Disney said Tuesday it has struck a deal with cable provider Comcast that gives the entertainment company control of streaming service Hulu. Ultimately, Disney guaranteed it would buy NBCUniversal's 33% stake in Hulu at a price that, at minimum, would value Hulu at $27.5 billion as of early 2024.

With this deal Disney eliminates some of the operational overhang with Hulu, which along with ESPN+ and the upcoming Disney+ streaming service is a key part of Disney's direct-to-consumer streaming strategy.

As to the question of why Disney would want more control of Hulu when they already have Disney+ coming this fall, it's simple: With the purchase of Fox and its many shows and films, they now control content that wouldn't fit on Disney+ because it's too graphic or too adult or just too weird.

In addition to the put/call agreement, Comcast will extend the Hulu license of NBCUniversal content and the Hulu Live carriage agreement for NBCUniversal channels until late 2024 and will distribute Hulu on its Xfinity X1 platform.

United States media giant AT&T subsequently sold the Turner stake to Disney and Comcast for US$1.43bn last month, after picking it up as part of its own takeover of Time Warner.

Comcast's NBCUniversal, meanwhile, will debut a streaming service in 2020.

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What happens in 2024 will be the real kicker for Hulu (and Disney).

Comcast's departure from the Hulu board will let Disney prepare unencumbered to expand the scope and reach of Hulu in the domestic and global markets to battle the likes of Netflix, Amazon.com Inc and Apple Inc.

Disney's own streaming service, Disney+, is scheduled to launch November 12. This goes for on-demand content as well as Hulu Live. In that move, the Defenders series of Marvel shows (Jessica Jones, Daredevil, Luke Cage, and the like) were canceled at Netflix, while the streaming destination for the Marvel Cinematic Universe library is moving to Disney+ beginning with Captain Marvel. Landgraf said he used to wish FX was its own stand-alone premium service. NBCUniversal's own streaming service was announced back in January of this year.

"It's a good hedge in terms of them being able to gauge whether their own service needs its content", Sappington said.

AT&T's sale valued the unprofitable Hulu at $15 billion.

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