Disney Takes Over Hulu From Comcast as Stream Wars Heat Up

Associated Press |

By TALI ARBEL

NEW YORK (AP) — Disney  (DIS) cut a deal with Comcast  (CMCSA) to take full control of Hulu as each prepares to launch its own streaming service.

The companies said Tuesday that Comcast, which owns a third of Hulu, may sell its stake starting in 2024 for a minimum of $5.8 billion. Either company can require the other to make the deal.

Hulu launched more than a decade ago as the major entertainment companies dealt with the rise of digital media. Its owners have contracted as a wave of mergers consolidated the industry: The Walt Disney Co. absorbed 21st Century Fox’s stake as it bought up Fox’s studio and many of its networks, while AT&T sold off the share it inherited with the purchase of Time Warner, now renamed WarnerMedia.

AT&T’s sale valued the unprofitable Hulu at $15 billion. The agreement with Disney and Comcast values Hulu at a minimum of $27.5 billion in 2024. Disney has forecast that Hulu will turn a profit around then.

Hulu today still shows network TV episodes and original series for $6 a month. It has a newer live-TV service that costs $45 a month.

Having total control of Hulu gives Disney more power to support its own streaming efforts. The company is launching a new kids-focused streaming service called Disney Plus this year, and is likely to bundle that with Hulu and its sports service, ESPN Plus.

Comcast’s NBCUniversal, meanwhile, will debut a streaming service in 2020. And WarnerMedia is launching its own streaming service which will focus on HBO and other shows and movies owned by the company. There’s also a new one from Apple, with original content.

An aftereffect of all these new services may well be the fragmentation of content across services. Most of the most popular shows on Netflix are owned by the big entertainment companies — “Friends,” ″The Office” — which may well want them for their own services.

At least for Hulu, NBCUniversal has agreed to keep its shows and networks on there until late 2024.

However, NBCUniversal is preparing to stock its own service as the streaming wars heat up. In a year, it can start putting its video on its own streaming service that is currently exclusive on Hulu. (It’ll cut Hulu’s costs in return.) And NBCUniversal could choose to pull its content from Hulu early, in three years.

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Michelle Chapman contributed to this report.

Link to original article on AP News.

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