LONDON: Disney CEO Bob Chapek hinted on Wednesday at a possible merger between the company’s two streaming platforms Hulu and Disney+.
Speaking at a Goldman Sachs investor conference, Chapek revealed how “a little bit of consumer friction” for streaming customers who want to shift between the different services prompted the company to consider the move.
According to Chapek, the company envisions “a platform for consumer engagement” for the entire Walt Disney company, rather than just a video streaming service.
“You add in things like the membership platform, you have to step back and look at this as Disney is a lifestyle, it’s a lifestyle brand,” he said. “And it’s not just a bunch of small businesses put together that sort of de facto create a lifestyle, but we need to embrace that.”
Walt Disney Co. offers Disney+, Hulu and ESPN+, which are available exclusively to the US public, to different audience groups. While Disney+ offers kids and family-friendly content, Hulu features more adult shows. The company also offers the ESPN+ streaming service for sports fans.
Currently, the three services are available across different platforms, with users having to toggle between different apps on their smartphones, televisions and other devices to watch content on each service.
Integrating all three services in one platform would significantly reduce the time needed to switch from one app to the other, ultimately offering a seamless user experience.
In Europe, Walt Disney Co. is already adopting a similar strategy, with the Disney+-owned content hub brand Star featuring several series that are also shown on Hulu.
However, in the US, the entertainment giant offers discounts for users signing up for its different services — something the CEO refers to as a “soft bundle.”
It remains unclear if the possible merger would see the integration of all of the Hulu library into Disney+ and if the move could signify an expansion of Disney+’s offerings in the Middle East and Africa region, where it launched last June.
Although Chapek has expressed more than an interest in merging Hulu and Disney+ in a unique solution, Disney must address some challenges. Currently, 33 percent of Hulu is owned by the US telecommunications conglomerate Comcast.
The two businesses have an agreement that allows Disney to purchase Comcast’s Hulu shares in 2024 at a minimum of $27.5 billion, but Chapek said that he would be interested in acquiring the remaining stake as early as possible.
“I do believe that we’d have to have full ownership of Hulu to integrate it into Disney+. We would love to get to the endpoint earlier, but that obviously takes some level of propensity for the other party to have reasonable terms for us to get there. And if we could get there, I would be more than happy to try to facilitate that,” he said.
The announcement comes as other industry players plan to adopt a similar strategy. Earlier in the summer, Warner Bros. Discovery Inc. announced it would combine its Discovery+ service with HBO Max, while last week Paramount Global revealed it is considering closing its Showtime streaming service and merging its content into Paramount+ with the aim of giving consumers a simplified and integrated offering.