The Walt Disney Co.’s announcement that it is acquiring the remaining 33% stake of Hulu that was held by Comcast comes amid a period of belt-tightening in Hollywood that has already resulted in higher prices for consumers.
In a news release, Walt Disney said the deal “will further Disney’s streaming objectives.”
Streaming services continue to maneuver to catch up to Netflix, the only streaming company to figure out how to post significant profits. The most recent move by Netflix was the addition of a tier that allows consumers to pay lower prices if they’re willing to watch ads.
Acquiring Hulu gives Disney a streaming service aimed at adults, as opposed to Disney Plus, which caters to younger viewers. The move had been considered likely based on recent comments from Disney CEO Bob Iger. Disney faced a deadline to acquire its remaining stake of Hulu from Comcast or sell it.
Consumers won’t see any immediate changes — and since Disney just announced a round of price hikes on its streaming platforms, more are unlikely in the near future.
Viewers will continue to have the option to bundle Hulu with Disney Plus (and also ESPN Plus if they wish). However, “one could see it as a sign of the times as more and more media companies look at merging and consolidating,” said Tom Nunan, a former network television executive and a lecturer at the UCLA School of Theater, Film and Television.
The move comes amid a period of nearly unprecedented uncertainty in the entertainment industry. Actors have been out on strike for well over 100 days, although signs are pointing to a resolution. A months-long writers strike recently wrapped up. Meanwhile, the aftermath of “peak TV” and the public’s changed viewing habits continue to reverberate.
Some 600 shows aired on TV this year. Estimates for next year range as low as half that many. The result is consumers will be paying more for less.
“Just about everyone’s announced price increases recently. . . . That is the future,” said Richard Rushfield, a longtime Hollywood observer and editor of an industry newsletter. “The big question mark hanging over everything is consolidation,” he said, with some of the legacy studios in difficult straits even as tech companies such as Apple have the cash to purchase them if they wanted to.
The move by Disney is also seen as another sign that Iger is in acquisition mode, Nunan said, after comments he made this year about restructuring and expanding Disney theme parks.
“This announcement along with the parks announcement feels like vintage Iger. He’s a spender — he doesn’t pull back,” Nunan said. “Contracting is off-brand for Iger.”
Walt Disney stock moved upward on the news.