Disney is on the verge of gaining full control over Hulu, with a significant acquisition deal in the works. The entertainment powerhouse has committed to paying $8 billion to secure Comcast's 33 percent stake in Hulu. This move will result in Disney achieving complete ownership of the popular streaming platform.
Acquiring Full Control of Hulu
The Walt Disney Company announced on Wednesday that it will acquire full control of Hulu, a leading global streaming service, through a transaction involving a minimum payment of $8.61 billion to buy out Comcast, which possessed a 33 percent stake in the service.
The Verge reported that this transaction stems from a 2019 "put-call" agreement between the two companies, and the final cost will be determined through an appraisal process that is expected to extend into the next year.
Having redirected popular shows like "Saturday Night Live" and "The Voice" from Hulu to its Peacock streaming platform, Concast recently expedited negotiations to sell its stake in Hulu to Disney.
Earlier, both Comcast and Disney had an agreement allowing Comcast to trigger Disney's purchase of its stake in early 2023, while Disney could, in turn, compel Comcast to sell its stake.
Disney's acquisition of Comcast's Hulu stake at fair market value will advance its streaming goals. Hulu, boasting around 48 million subscribers, features content from ABC, FX, Fox, and other established networks, as well as original series like "Only Murders in the Building" and "The Kardashians."
In response, Comcast expressed its anticipation of the appraisal process, expecting it to reflect the extraordinary value of the business.
Unifying the App Experience
Disney, in its drive to achieve profitability for its primary streaming service, Disney+, declared this year that it would offer Hulu content to subscribers of both platforms in the United States. Hulu is exclusively available in the U.S., while Disney+ has a global presence.
Disney intends to introduce this "unified app experience" by year-end, as stated on its press release. Hulu will persist as an independent offering, with an ad-free subscription priced at $18 and an ad-supported option at $8.
Disney states that the timeline for the appraisal process remains "uncertain" but anticipates its conclusion in the upcoming year. This process originates from Disney's agreement with Comcast to acquire Comcast's 33% Hulu stake, which was initially scheduled for 2024.
The original agreement included a hypothetical minimum valuation of $27.5 billion for Hulu, which was established five years ago. During a recent investor conference in September, Comcast CEO Brian Roberts highlighted the significant increase in Hulu's value since that time.
As Hulu's subscriber numbers experienced minimal change last quarter, New York Times reported that Disney introduced a pricing adjustment across all its streaming services and hinted at measures to address password-sharing.
In October, the cost of Hulu's ad-free service increased from $14.99 per month to $17.99 per month, while Hulu with Live TV surged from $68.99 per month to $75.99 per month. Disney's plans for Hulu are expected to be discussed in more detail during the company's upcoming earnings call.
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