Disney+ & Hulu to Combine Apps, Disney to Remove Streaming Titles
Disney intends to combine Disney+ and Hulu into one app by the end of 2023.
Disney CEO Bob Iger announced the decision in a fiscal second-quarter earnings call with investors on May 10, noting that Disney+, Hulu, and ESPN+ (all owned by Disney and offered together in various streaming bundles) will still exist as standalone apps.
“While we continue to offer Disney+, Hulu, and ESPN+ as standalone options, this is a logical progression of our DTC offerings that will provide greater opportunities for advertisers, while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger said on the call, per The Hollywood Reporter.
“The advertising potential of this combined platform is incredibly exciting,” he added, noting that Hulu’s award-winning library (which includes some FX on Hulu originals) and revenue warrant keeping the app running. Disney owns two-thirds stake in Hulu, with Comcast owning the remaining third. In 2024, Comcast can make Disney buy its one-third stake, or Disney can force Comcast to sell its stake to them. For the time being, Iger said that deal has not yet “been fully determined.”
In a post-earnings call the same day, Disney CFO Christine M. McCarthy said it will be removing select titles from streaming services, though she didn’t note which titles or when they would be taken down (per Deadline).
“We are in the process of reviewing the content on our DTC services to align with the strategic changes in our approach to content curation,” she said. “As a result, we will be removing certain content from our streaming platforms, and currently expect to take an impairment charge of approximately $1.5 to $1.8 billion. The charge, which will not be recorded in our segment results will primarily be recognized in the third quarter as we complete our review and remove the content.”
“Going forward, we intend to produce lower volumes of content in alignment with this strategic shift,” she added. McCarthy noted that the company expects to incur an impairment charge of $1.5 billion-$1.8 billion when it removes the selected content, but that they expect streaming profits to increase by $100 million in the next quarter.
Iger noted in his call that they “are confident we are on the right path toward streaming profitability.”
Disney+ lost 4 million subscribers in the first quarter of 2023, but its revenue reached $5.5 billion, a 12-percent increase (per THR).
