This article was originally published on Viking Social Agency on May 15, 2019

It seems that Disney’s expansion is far from done. Last month it was announced that Hulu had bought back the 9.5% share that AT&T acquired with its purchase of Time Warner for $1.43 billion. AT&T’s goal was to use that money to help pay off the debt it had acquired. This acquisition left Comcast with, roughly, 33% and Disney with 66%. With Comcast, the last hold out for Disney, the industry was left wondering how Comcast would respond, if at all.

This week, we have received our answer. Effective immediately, Disney will assume “full operational control” of Hulu because Disney and Comcast had reached a deal. While there is still more to be hammered out, Comcast will retain its 33% ownership but will have to sell as early as January 2024. This is to allow NBC/Universal to keep its programming on the service. 

Back when Disney acquired 20th Century Fox, Disney inherited it’s 30% share of the streaming service, giving Disney a total of  60% of Hulu. Disney seemed excited to have a controlling interest in the service and was looking to grow it in a way it had been unable to before. Among other things, the major goal for Disney seemed to be to get Hulu into international markets. As time went on, Disney informed audiences that Hulu would be the home for less family friendly fair. So far, Disney has announced a few Marvel specific shows to go alongside The Runaways such as The Offenders and the untitled Ghost Rider series. Disney also hinted that Hulu could be bundled in with a subscription to Disney+, which is due out later this year.

It’s not hard to see that over the last couple of years, Disney has become more ambitious with its business practices and continues to make waves within the entertainment industry. Starting with Disney+, continuing with the acquisition of 20th Century Fox and, now, taking total control of Hulu. With WarnerMedia and NBC/Universal launching streaming services of their own, it’s not hard to see where this whole thing started.

NBC/Universal’s decision seems to be based on their streaming service coming out sometime in 2020. No concrete information about that service has been announced as of yet, but they are looking for it to be the home of most, if not all, of their content. When the five years are up, Disney has guaranteed Comcast’s stake in Hulu, will be valued at, at least, $27.5 billion. By contract, NBC/Universal is guaranteed to hold onto this 33% stake until 2024, after which they could either be told to sell or decide to sell on their own.

NBC/Universal CEO, Steve Burke, called the Hulu deal with Disney “a perfect outcome for us.” He added that the extension of the Hulu content-licensing agreement “will generate significant cash flow for us, while giving us maximum flexibility to program and distribute to our own direct-to-consumer platform, as we build that business. Significantly, this transaction also affirms the value of our stake, provides a path to liquidity and ensures our continued equity participation in Hulu’s success.”

Disney has agreed to pay Comcast for its Hulu content for the next five years. Which means that Hulu will still be able to carry content made and distributed by NBC/Universal for film and television until 2024. NBC channels will be on Hulu Live at a higher rate than before. And NBC/Universal will also be able to run the same content on its own streaming service when it launches next year. For their part, Comcast (NBC/Universal’s parent company) will begin to distribute Hulu on its Xfinity X1 platform. Comcast plans to integrate the two platforms by the end of 2019 or early 2020, so that Xfinity X1 will be available to customers who have a Hulu subscription.

Who can guess where Disney goes from here, but we at least know that within five years, Hulu will be an exclusive home to Disney products and nothing else. Disney has come a long way from the studio that only made animated kids films. If they keep pushing the industry into new directions, they could single handedly change how audiences consume media within the next ten years.

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