Published: Wed, May 15, 2019
Culture | By Margie Dunn

Disney Takes Over Hulu, Giving It a Second Streaming Service

Disney Takes Over Hulu, Giving It a Second Streaming Service

Disney, which is due to launch its own streaming service, Disney+, in the USA in November, owns 67% of the streamer having been a founding partner in the business more than a decade ago.

The two companies have entered into a "put/call" agreement regarding NBCUniversal's 33% stake in the streaming service. At that future time, Disney can require NBCUniversal to sell its interest in Hulu for fair market value.

From January 2024, either Comcast or Disney can oblige the other side to begin the sales process - independent auditors will determine the final valuation of Comcast's stake, though Disney has guaranteed a floor price of $27.5 billion. After acquiring a majority stake in the streaming giant following the Walt Disney Company's historic acquisition of 21st Century Fox, Disney has officially wrested the final 33% stake in Hulu from NBCUniversal through a deal with Comcast.

Right now, Hulu has roughly 27 million paid subscribers on its service.

As part of the agreement, Comcast has agreed to extend Hulu's licensing of NBCUniversal content until late 2024.

With Disney now wielding full operational control over Hulu, it's unclear how the Hulu and Disney+ symbiosis will play out.

Earlier in April, AT&T sold its 9.5% stake in Hulu back to Hulu. That will change in late 2024, though, as Comcast will have the option of pulling that content and launching it on its own upcoming streaming service.

By 2022, NBCUniversal can cancel most of its content-licensing agreements with Hulu, which will help as it plans to launch its own free streaming service next year.

Disney CEO Bob Iger discussed the Hulu news this morning at MoffettNathanson's Media & Communications Summit. NBCUniversal, CNBC's parent company, will be able to stream the same content on its streaming service which is expected to launch next year. When Disney+ was unveiled last month a bundle option was teased, meaning subscribers could pair Disney+ with Hulu and ESPN+, which this deal makes it easier for them to do.

What that means for Hulu's library, which has quietly become one of the better ones on the internet - with a stronger mix of recent films and catalogue titles than the more popular Netflix - remains to be seen.

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