News Disney and Fox come to terms -- announcement soon; huge IP acquisition

[Quinnmac000]

Yes, you are right. I read that too....I think Disney and Comcast had Hulu purchase the 10% so the purchase wouldn’t have to go through anti-trust review. If Comcast wants their 3.33% they will have to come up with $500 million to cover the shortage at Hulu’s quarter end. Under this scenario Disney would pay $1.5 billion. If Comcast doesn’t want to cover the the $500 million shortage, then that 3.33% would go to Disney.

I also saw a report by Julia Borger on CNBC announcing the purchase by Hulu.... She said there are signs that Disney is in talks with Comcast (who owns CNBC) for their 30%. She pointed out that this sale of AT&T’s stake to Hulu, values the entire company at $15.0 Billion, which would make the value of the Comcast stake now worth $4.5 billion. It will be interesting to see if David Favor (CNBC Merger Analyst) has anything to add tomorrow morning....

Hulu would then lose that biggest new subscriber driver as it would be pulled by NBCU....as well as all NBCU properties.

‘The Act’ Crime Anthology Sets New Subscribers-To-Series Record For Hulu

'The Act' Crime Anthology Sets New Subscribers To Series Record For Hulu

deadline.com

As of last year, Brooklyn 99 (NBC), Law and Order, NBC Sports, and NBC Today were some of the most watched shows on Hulu streaming services. Adding in overall properties, the Office, 30 Rock, and Parks and Rec tend to be the most watched shows on streaming overall.

Home - Hulu

www.hulu.com

Is that 30% worth losing a huge chunk of popular shows?

Right now, it ain't worth it until they buildup the library more so and actually lock in more deals (I should point out that with Viacom making their own streaming service now and CBS all access, Hulu can be extremely negatively impacted in the future in terms of library with just adult Fox and Disney props)

 

[MisterPenguin]

Hulu would then lose that biggest new subscriber driver as it would be pulled by NBCU....as well as all NBCU properties.

‘The Act’ Crime Anthology Sets New Subscribers-To-Series Record For Hulu

'The Act' Crime Anthology Sets New Subscribers To Series Record For Hulu

deadline.com

As of last year, Brooklyn 99 (NBC), Law and Order, NBC Sports, and NBC Today were some of the most watched shows on Hulu streaming services. Adding in overall properties, the Office, 30 Rock, and Parks and Rec tend to be the most watched shows on streaming overall.

Home - Hulu

www.hulu.com

Is that 30% worth losing a huge chunk of popular shows?

Right now, it ain't worth it until they buildup the library more so and actually lock in more deals (I should point out that with Viacom making their own streaming service now and CBS all access, Hulu can be extremely negatively impacted in the future in terms of library with just adult Fox and Disney props)

It is my understanding that Hulu bought The Act that was co-produced by a Universal production company. If Hulu bought it, Hulu owns it.

 

[Quinnmac000]

It is my understanding that Hulu bought The Act that was co-produced by a Universal production company. If Hulu bought it, Hulu owns it.

It was solely produced by UCP and Buzfeed not co-production with Hulu. Hulu is the distributor/channel.

 

[MisterPenguin]

It was solely produced by UCP and Buzfeed not co-production with Hulu. Hulu is the distributor/channel.

I didn't say Hulu co-produced it. Writ Large, Eat the Cat (the LLC of one of the writers/showrunners), and Universal Content Productions co-produced it. Writ Large bought the rights to it based on a Buzz Feed article, thus Buzz Feed has no production credit.

​

On July 21, 2017, it was announced that Hulu had put the production into development. The potential series was expected to be written by Michelle Dean and Nick Antosca based on Dean's BuzzFeed article "Dee Dee Wanted Her Daughter To Be Sick, Gypsy Wanted Her Mom To Be Murdered." Writ Large, who acquired the screen rights to the article in 2016, was set to produce. Production companies involved with the series include Universal Cable Productions.[7]​

​

On May 18, 2018, it was reported that Hulu had given the production a series order. It was further announced that Dean and Antosca would serve as co-showrunners and executive produce alongside Greg Shephard and Britton Rizzio.[8][9] On August 1, 2018, it was announced that Laure de Clermont-Tonnerre would direct the series' first episode.[10] On December 20, 2018, it was announced that the series would premiere on March 20, 2019.[11] On March 11, 2019, Jeff Russo was announced to be the show's composer.[12]​

​

This is similar to how Netflix buys all their Original Series from various production companies. It then is owned, or at least the screening rights are owned, by Netflix.

 

[AnotherDayAnotherDollar]

Hulu would then lose that biggest new subscriber driver as it would be pulled by NBCU....as well as all NBCU properties.

‘The Act’ Crime Anthology Sets New Subscribers-To-Series Record For Hulu

'The Act' Crime Anthology Sets New Subscribers To Series Record For Hulu

deadline.com

As of last year, Brooklyn 99 (NBC), Law and Order, NBC Sports, and NBC Today were some of the most watched shows on Hulu streaming services. Adding in overall properties, the Office, 30 Rock, and Parks and Rec tend to be the most watched shows on streaming overall.

Home - Hulu

www.hulu.com

Is that 30% worth losing a huge chunk of popular shows?

Right now, it ain't worth it until they buildup the library more so and actually lock in more deals (I should point out that with Viacom making their own streaming service now and CBS all access, Hulu can be extremely negatively impacted in the future in terms of library with just adult Fox and Disney props)

Disney is already licensing something for Disney+. There's no way they won't license stuff for Hulu, including content from NBCU. They will also continue to license content from WBs.

You've been wanting Comcast to stay in Hulu for whatever reason, but it makes sense from both sides to separate. Your link actually shows Hulu would be just fine without NBCU and Comcast could also fetch higher prices somewhere else if they shop their shows around.

Why, oh why are you so adamant about wanting a JV that has limited options to expand internationally, limited options to bundle and price, and limited options to order content to continue? Those are all anti consumer things that seem to only be fixable under one ownership.

 

[Quinnmac000]

Disney is already licensing something for Disney+. There's no way they won't license stuff for Hulu, including content from NBCU. They will also continue to license content from WBs.

You've been wanting Comcast to stay in Hulu for whatever reason, but it makes sense from both sides to separate. Your link actually shows Hulu would be just fine without NBCU and Comcast could also fetch higher prices somewhere else if they shop their shows around.

Why, oh why are you so adamant about wanting a JV that has limited options to expand internationally, limited options to bundle and price, and limited options to order content to continue? Those are all anti consumer things that seem to only be fixable under one ownership.

You are making the assumption Comcast will give to Disney their valuable and proven properties and allow them to license over their own service.

Going back to the link which you say shows Disney can support alone, I can prove it doesn't.

As of now, Hulu can't support with just the properties it has. Once it loses WB which it will and Comcast which will actually happen....they are going to lose All the best of the Hulu Movie Charts ( all with exception of I-Tonya Distributed by Viacom once they open up their streaming service with Pluto), ER (Produced by Warner), Teen Titans (Produced by Warner), L&O (produced by NBC), Good Doctor (can be pulled from Hulu by Sony as the are the lead studio/distributor) Today (NBC), Brooklyn 99 (NBC)

Based on that, what does that leave? Castle Rock, Bob's Burger, Handmaid's tale, Family Guy and This is Us.

As a consumer, that means potentially now I'm paying for even more services instead of consolidation as well as Hulu losing even more value because they lost a lot of good stuff (the same problem Netflix is starting to face and why they paid over $100 million for Friends).

If you want Disney to pay more for television rights from other distributors than fine, but it in the end, its a symbiotic that benefits Disney and Comcast and the consumer right now for them all to be in together.

 

[Lafayettecalboy]

Disney plus Fox puts out less than 25% of movie titles. That is no where near a monopoly. No country had issues with Disney acquiring the movie and TV studios for that reason. You can't go by Box Office because there may be years when Disney movies bomb (like most Disney Studio films do already) and the other studios put out megahits.

Concerns over sports ownerships were taken care of. There is nothing there there for any future government to complain about. If they do, they'll lose in court like they did with the AT&T-Time Warner merger.

Sorry, this had been a long time, but has either the DOJ or FTC under any presidential administration ever reversed a previous merger allowed by another presidential administration?

 

[AnotherDayAnotherDollar]

You are making the assumption Comcast will give to Disney their valuable and proven properties and allow them to license over their own service.

I did not make that assumption. You did. And they wouldn't give it to them, they would get paid for it. Or, like you are alluding to, they would shop them around and get paid for it. I don't see the downside here.

Going back to the link which you say shows Disney can support alone, I can prove it doesn't.

As of now, Hulu can't support with just the properties it has. Once it loses WB which it will and Comcast which will actually happen....they are going to lose All the best of the Hulu Movie Charts ( all with exception of I-Tonya Distributed by Viacom once they open up their streaming service with Pluto), ER (Produced by Warner), Teen Titans (Produced by Warner), L&O (produced by NBC), Good Doctor (can be pulled from Hulu by Sony as the are the lead studio/distributor) Today (NBC), Brooklyn 99 (NBC)

Based on that, what does that leave? Castle Rock, Bob's Burger, Handmaid's tale, Family Guy and This is Us.

That's a theory, not a proof FYI. Will they lose some customers? Sure, but not as much as you are making out. Will they still license content from WB, NBCU, and others? Unless they all go with their own "Netflix killer" then yep they will. I disagree with your assessment, but I digress.

As a consumer, that means potentially now I'm paying for even more services instead of consolidation as well as Hulu losing even more value because they lost a lot of good stuff (the same problem Netflix is starting to face and why they paid over $100 million for Friends).

Seems like you won't pay for Hulu if Disney buys out Comcast's shares, so one less streaming service for you to pay! Win win for you! Meanwhile other pro consumer choices get activated and implemented. Win win for everyone else! What's the downside here?

If you want Disney to pay more for television rights from other distributors than fine, but it in the end, its a symbiotic that benefits Disney and Comcast and the consumer right now for them all to be in together.

It's not symbiotic. It's actually a pretty crappy one and I have given 3 examples as to why in my previous post. Another one? It gets crappy movies from all the owners (including Fox and Warner when they owned them).

Hulu reminds me of Sony BMG before Sony acquired the Bertelsmann out of the JV and look how much better SME is now.

 

[Indy_UK]

I think Disney are going to have to throw some money towards Hulu. Maybe from the RSNs that will free up some money to buy Comcast’s share of Hulu at a slight premium otherwise I can’t see Comcast selling. Then they’ll have to throw money to get 3rd party licensed content on the service.

 

[seascape]

There is Hulu and Hulu with live TV. The cable TV bundle will eventually die. Hulu will continue to offer lots of shows they buy from Disney/Fox and others. As for individual shows and TV networks included on live TV and reruns it will depend on individual contracts with the TV networks.

So where does that leave Hulu? It depends, but if Comcast doesn't provide NBC to Hulu, how can they think Disney will provide their networks to Comcast? Plus is someone had to choose all the Disney networks including those jointly owned we with Hurst or the NBC Universal networks which would you pick? Disney clearly has more desirable networks and overall value than NBC Universal. NBC alone may be more popular than ABC but that is only one channel and both can be viewed over the air for free.

Looking at Disney's over the top offerings and their initial projected subscribers, Disney in my opinion massively underestimated their initial and first few years of actual subscribers. JP Morgan estimates Disney will have 160 million worldwide subscribers in the same time period Disney is estimating 60 to 90 million. Disney does not normally provide future guidance so this should be expected. Finally, when comparing Disney's worldwide subscriber number vs Netflix, Hotstar needs to be included because they blow everone else out of the water in India. Disney has to be looked at differently than other companies with just one streaming service. I would also expect Hotstar to offer their service in the US because their are areas and lots of people in the US that watch Bollywood movies.

 

[Indy_UK]

I Think these smaller service like CBS All access won't be as successful as they hope, so I can see that content being on Hulu eventually.

 

[britain]

Okay – you know what they need to do in order to resurrect a Disney project they couldn't quite get off the ground while simultaneously inject new life into a popular-but-fading Fox IP?








I do.







I give you...









Night in the Museum IV: Magic Kingdom

 

[sedati]

Okay – you know what they need to do in order to resurrect a Disney project they couldn't quite get off the ground while simultaneously inject new life into a popular-but-fading Fox IP?








I do.







I give you...









Night in the Museum IV: Magic Kingdom

Jon Favreau Says Magic Kingdom Movie Still in Development

Jon Favreau says he's still developing his Magic Kingdom movie for Disney and that the film could be his followup to The Jungle Book.

screenrant.com

 

[britain]

Jon Favreau Says Magic Kingdom Movie Still in Development

Jon Favreau says he's still developing his Magic Kingdom movie for Disney and that the film could be his followup to The Jungle Book.

screenrant.com

Yeah, developing into a Night in the Museum sequel!

 

[mab7689]

Let's get this back on track. Bloomberg reports there are 3 final bidders for the RSNs. Liberty + MLB combined, Sinclair and BIG3.

Bloomberg - Are you a robot?

 

[MisterPenguin]

I would also expect Hotstar to offer their service in the US because their are areas and lots of people in the US that watch Bollywood movies.

hotstar is already available in the U.S. and Canada.

Jon Favreau Says Magic Kingdom Movie Still in Development

Jon Favreau says he's still developing his Magic Kingdom movie for Disney and that the film could be his followup to The Jungle Book.

screenrant.com

I think there's going to be a lot of movies which were talked about and sitting in limbo that suddenly get greenlit for D+ and Hulu. Not worth a theatrical release, but will fill the gaping maw of the streaming service's appetite for ""original content.""

Sorta like the current Netflix vortex of originals. Iger has mentioned several times that D+ is the top priority for the entire company. For the entire company! And because of that, he's been warning investor's of all the future billions of dollars that Disney is going to be sinking into D+ to make it profitable in just four years. Until then, Disney's profits will be reduced, so, investors, deal with it.

 

[bartholomr4]

You are making the assumption Comcast will give to Disney their valuable and proven properties and allow them to license over their own service.

Going back to the link which you say shows Disney can support alone, I can prove it doesn't.

As of now, Hulu can't support with just the properties it has. Once it loses WB which it will and Comcast which will actually happen....they are going to lose All the best of the Hulu Movie Charts ( all with exception of I-Tonya Distributed by Viacom once they open up their streaming service with Pluto), ER (Produced by Warner), Teen Titans (Produced by Warner), L&O (produced by NBC), Good Doctor (can be pulled from Hulu by Sony as the are the lead studio/distributor) Today (NBC), Brooklyn 99 (NBC)

Based on that, what does that leave? Castle Rock, Bob's Burger, Handmaid's tale, Family Guy and This is Us.

As a consumer, that means potentially now I'm paying for even more services instead of consolidation as well as Hulu losing even more value because they lost a lot of good stuff (the same problem Netflix is starting to face and why they paid over $100 million for Friends).

If you want Disney to pay more for television rights from other distributors than fine, but it in the end, its a symbiotic that benefits Disney and Comcast and the consumer right now for them all to be in together.

Interesting Dialogue.... I would add the following:

Hulu & Netflix pay the content distributors when someone watches a movie, show, cartoon etc. They don't get anything if people don't watch them. With Hulu advertised, the distributers also get advertising share from those shows viewed with any ads. So removing items from a service greatly reduces your income from the asset.

Hulu currently pays AT&T, Fox/Disney, Comcast, for their shows, but then at the end of the quarter. If Hulu didn't have enough money to pay all the bills, these partners would have to return a portion or more of what they got in cash to cover the shortage. Maybe they get some equity to offset the investment, but it is a shell game, "I give you some money, I owe a bunch of bills, you give me back some of them money" ..... Now that AT&T is out, Warner will get their payments but won't have to true up at the end of the quarter, Fox/Disney and Comcast will have to pay their portion. I think this is going to mount (the shortage) as the cost of exclusive content and international expansion starts to show up at the end of each quarter.

It will be instructive to see how the AT&T shares are divided between Disney and Comcast. Does Disney allow Hulu to borrow money to pay for these shares? Or does Comcast / Disney have to come up with this cash? What signals / game theory can be derived from their moves? If Disney ends up with all of the AT&T shares, you get a strong signal from Comcast that they want to shrink the relationship.

Comcast also has to start to think about investing in a response to 5G. The FEC announced an auction coming this December with $20 billion in incentives for the telco's. Does Comcast buy some of the spectrum? Or does Comcast spend a bunch of money upgrading / defending their wired network? Or do they do some of both. Comcast has said it will reduce its debt (post purchase of Sky) by close to $5 Billion a year. Not sure how they can participate in the international expansion of Hulu, spend money on Sky integration, roll out their own competing over the top streaming service, respond to the 5G roll out, and reduce their debt load by $5 billion a year, and do all of that (while maintaining their current dividend) out of current cash flows.

Regardless, there is a good argument Comcast will want to sell their shares of Hulu to Disney, or at least not match Disney 3$ for every 7$ Disney spends on Expanding Hulu.... If they don't, Disney's equity in Hulu will grow. Comcast will also likely not be in a big hurry to take their content off of Hulu and dig them selves a revenue hole. Just thinking..... my opinion.

 

[Quinnmac000]

Interesting Dialogue.... I would add the following:

Hulu & Netflix pay the content distributors when someone watches a movie, show, cartoon etc. They don't get anything if people don't watch them. With Hulu advertised, the distributers also get advertising share from those shows viewed with any ads. So removing items from a service greatly reduces your income from the asset.

Hulu currently pays AT&T, Fox/Disney, Comcast, for their shows, but then at the end of the quarter. If Hulu didn't have enough money to pay all the bills, these partners would have to return a portion or more of what they got in cash to cover the shortage. Maybe they get some equity to offset the investment, but it is a shell game, "I give you some money, I owe a bunch of bills, you give me back some of them money" ..... Now that AT&T is out, Warner will get their payments but won't have to true up at the end of the quarter, Fox/Disney and Comcast will have to pay their portion. I think this is going to mount (the shortage) as the cost of exclusive content and international expansion starts to show up at the end of each quarter.

It will be instructive to see how the AT&T shares are divided between Disney and Comcast. Does Disney allow Hulu to borrow money to pay for these shares? Or does Comcast / Disney have to come up with this cash? What signals / game theory can be derived from their moves? If Disney ends up with all of the AT&T shares, you get a strong signal from Comcast that they want to shrink the relationship.

Comcast also has to start to think about investing in a response to 5G. The FEC announced an auction coming this December with $20 billion in incentives for the telco's. Does Comcast buy some of the spectrum? Or does Comcast spend a bunch of money upgrading / defending their wired network? Or do they do some of both. Comcast has said it will reduce its debt (post purchase of Sky) by close to $5 Billion a year. Not sure how they can participate in the international expansion of Hulu, spend money on Sky integration, roll out their own competing over the top streaming service, respond to the 5G roll out, and reduce their debt load by $5 billion a year, and do all of that (while maintaining their current dividend) out of current cash flows.

Regardless, there is a good argument Comcast will want to sell their shares of Hulu to Disney, or at least not match Disney 3$ for every 7$ Disney spends on Expanding Hulu.... If they don't, Disney's equity in Hulu will grow. Comcast will also likely not be in a big hurry to take their content off of Hulu and dig them selves a revenue hole. Just thinking..... my opinion.

I think that becomes the benefit of the Comcast ownership with international expansion particular in Europe. (Disney will be fine 100% without Comcast in India with the domination that Star has on the market). However in US and Europe, who already owns a international broadband service that can now bundle Hulu boosting the number of subscribers? Comcast. What program does that Comcast has that already aggregates all APP data so you don't have to switch apps but still access and subscribed to all your services? Comcast Xfinity which will move to Sky this year. Hulu likely no matter where will have some form of low cost AVOD which Comcast part ownership would assist in. While that deal benefits Disney more especially if Comcast stays for international expansion, there are still ways Comcast can exploit such as bundling Hulu+/Disney+ to sell more Sky packages overall with ease of access concept. Additionally in regards to international expansion, a strength Comcast has that will help drastically in Asian markets is their ownership of a ton of anime (over 450 IPs)/Korean drama titles (200 titles last time I checked)/ and foreign distribution of Chinese dramas (I don't know much as this is hard to find but from what I've seen is a decent size. (when it comes to adult Asian content outside India, Fox and Disney both lack as well as neither invested heavily in anime which is a popular genre in the East to this day).

I saw you mentioned Comcast streaming service overall goal isn't to be a Disney+/Netflix Killer as its going to already be provided for free to Sky and Comcast customers (Not even AT&T is doing that with their service). So if every Sky and Comcast gets it and uses it and no one else subscribers...lowballing both Sky and Comcast lets say Sky has 12 million subscribers and Comcast has 25 million subscribers. That's 37 million contributing to ad revenue not just domestic but worldwide which puts ad space even more at a premium. That will help reduce costs for Comcast.

As for 5G, I get the hyped but one thing most people forget about is the power output/device technology/and cost of 5G for both companies and consumers in the near future will be brutal. I don't think Comcast is going to rush a 5G rollout .

 

[Indy_UK]

The ball is well and truly in Disneys court. They could absolutely screw Comcast and pull all their Disney/Fox content from SKY which I assume is their plan by the end of 2021/2022.

Comcast must be realising this by now because their subscriber numbers are going to take a massive hit once it happens. I reckon a good 6 million subscribers minimum dropping SKY as a result, with a base of 23 subscribers

 

[Quinnmac000]

The ball is well and truly in Disneys court. They could absolutely screw Comcast and pull all their Disney/Fox content from SKY which I assume is their plan by the end of 2021/2022.

Comcast must be realising this by now because their subscriber numbers are going to take a massive hit once it happens. I reckon a good 6 million subscribers minimum dropping SKY as a result, with a base of 23 subscribers

The most watched Sky series had no correlation to Fox/Disney though with the exception of Atlanta (FX) [The most watched shows are Sky produced dramas (Das Boots) HBO and Showtime owned/co-produced with Sky shows (Game of Thrones West World, Penny Dreadful), and factual shows produced by Sky] The biggest Disney loss would be reflected in the Sky Movies and Sky Kids sections but those are easily supplemented. I don't think anyone subscribes to Sky for just those two things.

Don't forget Disney has lost ownership of all their A&E Europe Assets as part of obtaining Fox.