CaptainAmerica
Premium Member
The most significant cuts will be internationally. In addition to getting local language versions of American content, international markets are also getting a lot of local content made just for them.
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Disney's Streaming Services: Disney+ (and Hulu, ESPN+, Star, & hotstar)
- Thread starter MisterPenguin
- Start date
Disney Irish
Premium Member
Not sure where you get the idea that a “new” deal is being actively negotiated. Nothing in Iger’s comments indicates that is happening. Also since Disney is majority owner they have the right to refuse anyways.
CaptainAmerica
Premium Member
CaptainAmerica
Premium Member
Kannan, as you know, we have a contractual arrangement with Comcast that will enable them to put their share of Hulu back to us in early 2024 -- starting in early 2024. There's a, I guess, further right that we have to call their share from them. And it's not really been fully determined what will happen in that regard except that, as we look more and more at the growth of -- or the future of our streaming business -- and I mentioned at the first earnings call that I did after I came back that everything was on the table And, in fact, everything was on the table. But I've now had another three months to really study this carefully and figure out what is the best path for us to grow this business.
And it's clear that a combination of the content that is on Disney+ with general entertainment is a very positive, is a very strong combination from a subscriber perspective, from a subscriber acquisition, subscriber retention perspective, and also from an advertiser perspective. So, where we are headed is for one experience that would have general entertainment and Disney+ content together for the reasons that I just described. How that ultimately unfolds is, to some extent, in the hands of Comcast and in the hands of a -- basically, a conversation or a negotiation that we have with them. I don't want to be in any way predictive in terms of when or how that ends up.
I can say we've had some conversations with them already. They've been cordial and they're aimed at being constructive, but I can't tell you and I can't really say where they end up, only to say that there seems to be real value in having general entertainment combined with Disney+. And if, ultimately, Hulu is that solution, that's we're -- we're bullish about that.
And it's clear that a combination of the content that is on Disney+ with general entertainment is a very positive, is a very strong combination from a subscriber perspective, from a subscriber acquisition, subscriber retention perspective, and also from an advertiser perspective. So, where we are headed is for one experience that would have general entertainment and Disney+ content together for the reasons that I just described. How that ultimately unfolds is, to some extent, in the hands of Comcast and in the hands of a -- basically, a conversation or a negotiation that we have with them. I don't want to be in any way predictive in terms of when or how that ends up.
I can say we've had some conversations with them already. They've been cordial and they're aimed at being constructive, but I can't tell you and I can't really say where they end up, only to say that there seems to be real value in having general entertainment combined with Disney+. And if, ultimately, Hulu is that solution, that's we're -- we're bullish about that.
Disney Irish
Premium Member
None of that indicates that an actual “new” deal is being discussed. But you interpret it however you like. We’ll see what happens over the next 6ish months.
CaptainAmerica
Premium Member
What in the seven hells else could "How that ultimately unfolds is... in the hands of... a negotiation that we have with them" mean?
Disney Irish
Premium Member
Again you can interpret it however you like. But reading it in the context of the larger comment it to me appears to be CEO speak for “we’re doing everything we can to make sure we’re getting full ownership of Hulu in the end.” But it doesn’t indicate to me that it means an actual “new” deal in the end or in anyway Comcast having a chance at Hulu.
So again we’ll see what happens in 6ish or so months.
CaptainAmerica
Premium Member
It's very clear what's happening.
- Last quarter, Iger said he wasn't sure they wanted to be in the "general entertainment" business at all
- Now he's saying that he does want general entertainment content, and he wants it on Disney+
- He doesn't seem to care much whether the GE content lives inside a thing called "Hulu" or not
I don't think you understand the current contract that's in place. If Disney and Comcast stopped talking to each other entirely and did nothing, Disney would already get full ownership of Hulu in the end. You're describing the CURRENT deal. Iger and Disney don't have to "do" anything to get all of Hulu, that happens automatically in 2024. If that's what they wanted, there's nothing to negotiate.
Disney Irish
Premium Member
Not sure how your scenario works with Hulu being a tab in D+ by year end.
But guess we’ll see.
CaptainAmerica
Premium Member
I edited my post to add more. I don't think you understand the current deal.
Disney Irish
Premium Member
I do understand the current call/put deal which also includes valuations. Comcast can also ask for more if they want as the valuation is only the floor of the sale, hence the negotiation.
Also Iger specifically stated Hulu is the solution to general entertainment. So not sure how you get that he still want to sell the entity known as Hulu.
CaptainAmerica
Premium Member
Iger is obligated to use Hulu as the solution for general entertainment until the Comcast issue is resolved. He can't just strip it for parts, leaving nothing more than a worthless shell because they have a minority owner.
It's the same thing as ESPN, which is 20% owned by Hearst. Every quarter, Disney has to cut a giant check to Hearst for 20% of the profits of ESPN. Disney can't spin up a new entity called "Disney Sports," sell all of ESPN's assets and operations to that entity, and then tell Hearst "welp, sorry, the thing you own is worthless so we don't have to pay you anything anymore."
If you own 40% of my bakery, I can't start a new bakery, sell the first bakery to myself for $1, pay you $0.40 (your share of the $1) and then claim I have a new bakery that I own 100%.
Disney Irish
Premium Member
Agree to disagree. Again we’ll see what happens. I won’t be surprised with whatever happens as this is business. But so far this has played out almost exactly how I thought it would and have been saying since 2019.
Serpico Jones
Well-Known Member
“DTC plan for more subs, higher prices and lower cost seems like cognitive dissonance“ -Wolfe Research analyst Peter Supino
www.hollywoodreporter.com
Disney Analyst Downgrades Stock Due to “Risky” Streaming Sub Forecasts, “Deteriorating” Linear TV
Wolfe's Peter Supino moves from an "outperform" to a "peer perform" rating, citing "cognitive dissonance."
www.hollywoodreporter.com
BrianLo
Well-Known Member
I think the most likely scenario would be a licensing deal for X number of years for FX, before Disney would recover it under the Star banner.
The tab would just be changed out for Star and some of the content would have to shift depending on whatever licensing agreement terms they would surely need to come to, so that Comcast wasn't just being handed a shell of a service. Though the entanglement of the subscribers gets harder to unwind.
I actually will disagree with you on this that it's certainly not impossible Comcast could acquire it. I don't know if they want to because it's kind of hard to tell how much value is actually there without owning the underlying studios and IP on the service. For that reason I think Iger will shop it to them and inevitably the path of least resistance is Disney acquiring the remaining third.
Keep in mind that if Disney's buyout for Comcast's portion of Hulu is $9B, then Comcast's buyout of Disney's portion would be $18B. That's 3 Epic Universes.
Not sure if Comcast would want to spend that amount....
Not sure if Comcast would want to spend that amount....
CaptainAmerica
Premium Member
No. Everything is negotiable. If they end up doing anything other than the current deal, they wouldn't be bound by the current deal's predetermined price.
There are many potential outcomes that are much more complicated than "Disney or Comcast buys the whole thing."
Disney Irish
Premium Member
I could see a licensing deal if Disney was to give up on Hulu. However I just don't think they are willing to just hand over Hulu just some here are thinking.
I've reread Iger's comments many times, and if he was just going to sell Hulu he wouldn't have said:
"we're bullish about Disney+ and Hulu and that combination, by the way. We think that by making Hulu available as a one-app experience will increase engagement and increase our opportunity in terms of serving digital ads and growing our advertising business"
I've said for awhile now that I think some time after Disney fully owns it that the Hulu brand will fade away and just be renamed Star. Or heck I could see them even going the other way, and just rename Star to Hulu worldwide. But as you know I've said for a long time that a unified experience was coming, and that is happening.
Also the sub are the issue that I don't think anyone here is really thinking about.
Does anyone here really think that Iger is really just going to say “Sure Comcast you just take most of Hulu's 48.2M subs"? Especially since they are the highest ARPU that Disney has. I mean sure some of those are Bundle subs. But really I don't think Iger is going to let any go without a fight, especially since Wall St just raked Disney over the coals for losing 4M of the cheap subs. What do you think they will do when Disney potentially loses 10s of Million sub from Hulu going to Comcast that are the highest ARPU?
Also lets really talk about the buyout here. Comcast already has $100B in debt, I don't see them adding potentially $18B (or more) of debt just to gain Hulu. I really don't think they want Hulu anyways, notice how Roberts hasn't say anything about potentially wanting Hulu since last year. We live in a different world in terms of streaming than we did just 9 months ago when Roberts made his Hulu comments. And a lot of analysts out there thought his comments were really about trying to drive up Hulu's valuation anyways, so there is that too.
So in the end I'm still saying that Disney ends up with full control of Hulu, whatever the "deal" actually looks like who cares. But we'll see what happens.
doctornick
Well-Known Member
Y’know one of the things I don’t like about D+ is the inability to rate something you’ve watched, even just a 
or 
. You’d think that would skew their evaluation of how well received something is. I mean, if someone starts watching a series and doesn’t finish that obviously is telling. But I will sometimes finish something just to have the complete story but really not enjoy it that much or be interested in a second season. Also it can mess up the suggestion algorithm if it gives you options related to something you watched but didn’t like all that much.
or . You’d think that would skew their evaluation of how well received something is. I mean, if someone starts watching a series and doesn’t finish that obviously is telling. But I will sometimes finish something just to have the complete story but really not enjoy it that much or be interested in a second season. Also it can mess up the suggestion algorithm if it gives you options related to something you watched but didn’t like all that much.
Pay TV is suffering from what Moffett calls “the impoverishment cycle,” in which higher sports-broadcast fees have driven retail prices higher — thereby fueling cord-cutting and forcing distributors to increase prices to compensate. Even ESPN, one-time stalwart of the traditional ecosystem, has conceded that there will be a day when a la carte streaming is a viable option, Moffett noted.
“We haven’t really changed our position regarding basically migrating ESPN’s flagship service as a direct-to-consumer or streaming platform,” Disney CEO Bob Iger said on the conglomerate’s May 10 earnings call. “We think there’s an inevitability to that, but it’s a huge decision for us to make. And we know that we’ve got to get it right, both in terms of pricing and timing.”
Cord-Cutting Hits All-Time High in Q1, as U.S. Pay-TV Subscriptions Fall to Lowest Levels Since 1992
As streaming video continues its ascendancy, cable, satellite and internet TV providers in the U.S. turned in their worst subscriber losses to date in the first quarter of 2023 — collectively…
variety.com