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Industry Experts Weigh In on Disney’s Acquisition of Comcast’s Stake in Hulu
As growing pains continue to plague the streaming industry, Disney is preparing to buy out Comcast’s stake in Hulu for at least $8.6 billion. It’s the latest sign of volatility in the space and a move that competitors are closely watching.
J. Christopher Hamilton is a Syracuse University professor with a background as a media executive and entertainment attorney. He took time to answer some questions about Disney’s plans and the potential implications for the industry.
What is the overall assessment from industry insiders about Disney buying out Comcast’s stake in Hulu?
“Overall, industry insiders think the Disney acquisition of Comcast’s stake in Hulu was an inevitable move that has the potential to benefit the future of Disney streaming. Disney previously announced that they want Hulu content to be on Disney + and the intention to create a “one app experience” combining the two. But like other streaming companies, Disney has been struggling with investor confidence and streaming profitability. Furthermore, streaming is a sinking ship these days and combining the two streaming services or trying to create bundle packages may not appeal to either of the services’ current audiences.”
How might other media companies/streamers respond to the move?
“Disney has been the market leader in streaming among the other legacy media companies. Netflix is even watching Disney’s revenue from ad-supported content to compare it to the potential variability of its AVOD offering, as well as trying to model a broader content offering (sports and gaming) based on Disney’s success.”
Like other streaming companies, Disney has been struggling with investor confidence and streaming profitability.J. Christopher Hamilton
This come as Disney is raising prices on its services. How does this purchase play a role?
“Disney is experimenting with pricing, content, and their overall business strategy because they haven’t figured out how to properly balance it all while taking account of cost savings and their marketing spend. Even though they might be losing subscribers, those potential losses align with the promotion of their lower-tier ad-supported service and their new bundle called the Duo Premium, which combines Disney+ and Hulu, ad free, for $19.99 a month.”
Are there indicators that Comcast might have its own separate ambitions to raise prices for its streaming service?
“Peacock has been successful with advertising revenue but lacks large subscribers when compared to industry rivals. Although Peacock had 42 million signups, less than 10 million of those consumers were paying for the service due to it being free with Comcast cable and internet customers. But they don’t see Disney + and Netflix as their competition. They consider Roku and Amazon their rivals. Comcast is trying to prepare for where the customer is going (i.e., software/streaming applications and video games). Therefore, they likely won’t raise prices to invest in more content production or larger profit margins and risk losing their limited number of subscribers.”
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