The Walt Disney Company has officially declared its full acquisition of Hulu, buying out Comcast’s stake for a whopping $8.6 billion.
This strategic move, announced on Wednesday, is expected to significantly “further Disney’s streaming objectives”, according to a company statement.
The acquisition comes amidst Disney’s endeavor to ramp up the subscriber base for its streaming service, Disney+.
Disney acquires full ownership of Hulu in a move to bolster streaming
This new deal sets Hulu’s total valuation at $27.5 billion, with Disney indicating that the transaction should be finalized by December 1.
The journey towards full acquisition commenced in 2019 when Disney struck a deal with Comcast to take over the majority stake in Hulu, leaving Comcast with a residual 33% stake.
The terms of the deal mandated Disney to buy out or sell the stake at fair market value as early as January 2024.
As a California-based entertainment behemoth, Disney has been bundling Hulu with its Disney+ and ESPN+ platforms, offering a comprehensive entertainment package to subscribers. The company is set to unveil its latest quarterly earnings in the coming week, which will shed light on the performance of its cable and streaming television services amidst the ferociously competitive market.
The disclosure in August revealed a loss of over 10 million subscribers for Disney+ in the recently concluded quarter, largely attributed to the Indian market. Despite the setback, Disney+ ended the second quarter with 146.1 million subscribers, a slight dip from nearly 158 million in the preceding quarter.
In contrast, Netflix, a primary competitor, reported a close to 11 percent surge in subscriber numbers, reaching 247 million in the same quarter, following a crackdown on password sharing and an introduction of an ad-supported tier. The price hike on some of Netflix’s plans could potentially create a window of opportunity for rivals like Disney.
The upcoming Disney earnings report is keenly awaited, as it’s expected to provide insights into the performance of its ad-supported tier, especially in the wake of Netflix reporting a positive traction for its similar offering.
On a related note, the ongoing Screen Actors Guild strike has put a pause on film and television productions, hinting at a probable scarcity of new content crucial for attracting and retaining streaming service subscribers. The full implications of this strike on streaming giants like Disney remain to be seen.
With information from CBS News