As its competitors have acquired each other and introduced new pricing models, Hulu has remained relatively quiet over the past few months. It turns out, however, that behind the scenes, there’s reportedly been a lot more action going on, specifically between co-owners Comcast and Disney. In fact, Comcast has allegedly stopped contributing money to the company and is now, per reports, locked in a legal battle with the Mouse House to figure out how much the service is worth, as it may exit the partnership in 2024.
There’s a lot going on here, but it’s all laid out nicely in a report put together by The Information. In it, the outlet claims a lot of the problems started during the pandemic when Disney decided to cancel Hulu’s planned international rollout. People have plenty of theories as to why that decision was made, from cash flow issues with its theme parks temporarily closing to strategic alignment with Disney+ concerns, but regardless, the end result is Hulu International didn’t move forward and some of the content US audiences get on Hulu was put onto Disney+ in foreign markets. That reportedly didn’t sit well with Comcast.
The behind the scenes stuff at Hulu has always been very complicated. Next TV does a good job of outlining the specifics here, but in short, Hulu launched in 2007 as a partnership between Disney, Fox and NBC Universal, the latest of which was eventually acquired by Comcast. Time Warner later joined as well with a smaller percentage of ownership. Disney then purchased Fox and Time Warner sold back its roughly ten percent stake. That left Disney and Comcast as partners. They subsequently entered into an agreement that gave Comcast a clause whereby it could force Disney to buy out its remaining thirty-three percent stake in 2024 for fair market value. It also allegedly stipulated that Comcast could stop funding Hulu if it so decided but such a decision would reduce its ownership stake depending on a variety of factors.
I know that was a lot, but long story short, if the reports are to be believed, Comcast is not contributing to Hulu’s budget anymore, which has everyone involved supposedly trying to figure out how much the streaming service is worth. That’s an extremely complicated question and one that will likely take awhile to sort out. As there are potentially billions of dollars at stake, given Hulu has more than forty million subscribers, I’m sure expenses will not be spared in trying to figure this out.
Then again, the long-term direction of Hulu is going to take awhile to figure out too. I remain convinced that it’s a fundamentally different offering than Disney+. I’d like to see it thrive on its own long-term, but if and when Disney buys out Comcast’s stake, it is going to need to decide what the vision is, both in the United States and globally. As a subscriber myself, I’ll just say hopefully whatever that vision entails involves a lot of great original content.