The Final Piece: Hulu to Become Fully Owned by Disney

As widely anticipated, Disney has officially declared its intent to acquire the remaining 33% stake in the streaming service Hulu, the BBC reports.

The company has announced that it will buy the final share it doesn’t own of Hulu from the TV giant Comcast.

Hulu Joins Disney’s Realm

Disney’s latest purchase will give the streaming giant full ownership of the streaming service and the ability to incorporate it into its own Disney+ platform.

To acquire this stake, Disney has been locked in a battle with several other streamers as its profits have fallen.

In a statement, the company stated that its complete takeover of Hulu is expected to cost some £7bn.

However, it believes that this move will “further Disney’s streaming objectives” as it seeks to boost subscriber numbers.

The Prequel to Disney’s Acquisition

This latest move will complete Disney’s purchase of Hulu, but this is a widely expected move from the entertainment giant, already selling Hulu as part of bundled offerings with its Disney+ and ESPN+ platforms in the US.

And, in the UK, some Hulu content is also already available to watch via the Disney+ app, such as The Kardashians and The Bear.

The acquisition’s total cost is based on a “guaranteed floor value” that was set when Disney, headquartered in California, acquired 21st Century Fox from Rupert Murdoch in a major 2019 deal, which included a majority stake in Hulu.

In an agreement reached between Disney and Comcast during that year, both companies were granted the right to initiate the sale of Comcast’s stake in Hulu. Executives from both sides have expressed their desire to pursue this deal.

But at a conference this year, Comcast chief executive Brian Roberts described Hulu as a “scarce kingmaker asset”, which was “way more valuable today” due to its hits like the series Only Murders in the Building.

On Wednesday, Disney stated that it hoped the deal would be concluded by 1 December, although negotiations with Comcast, NBC Universal’s parent company, are still ongoing.

In the announcement, Disney said that if the current value of Hulu was determined to be greater than the guaranteed price, it would pay NBC Universal the difference.

Hulu currently has about 48.3 million subscribers, in comparison with Disney’s 146.1 million globally.

Disney: The Next Chapter

In August, Disney’s CEO, Bob Iger, explained to investors about the company’s plans to consolidate content from its various brands into a single app in the US.

Mr Iger explained that, with the reopening of economies after pandemic lockdowns, there has been intense competition for audience attention.

Disney had faced a range of challenges, including underperforming films and a significant decline in advertising sales in its traditional television business, leading to declining profits.

While the company’s overall revenue increased by 4% year-on-year in the three months ending on July 1, it posted a loss of $460 million, in contrast to a $1.4 billion profit during the same period the previous year.

Disney isn’t the only streaming service that has been exploring methods to increase revenue and address issues related to password-sharing.

Additionally, strikes in the film and television sector in the United States have caused interruptions in the production of new content, affecting efforts to engage audiences.

A senior Disney creative behind films like Frozen recently stated that the actors’ strike could halt animation production later this year.

This situation could exacerbate the challenges facing the entertainment giant and help to shed light on the rationale behind its acquisition of Hulu.