Guest Column: What Does it Really Mean to Merge Hulu and Disney+?
Our first guest column is here, and it comes from streaming analyst When’s It On Streaming?, who provides some of the best information and analysis of the SVOD landscape on Twitter/X.
What Does it Really Mean to Merge Hulu and Disney+?
Guest Column by When’s It On Streaming?
On December 6, with minimal warning, Disney+ began the launch of its “beta” version of Hulu on Disney+, a move that brought a large chunk of the Hulu streaming service’s movies and TV shows (both originals and otherwise) to the Disney+ service. But as that new Hulu logo takes its place alongside the iconic brands of Pixar, Marvel, and National Geographic, we’re left wondering precisely what this partial absorption means for Hulu – as a service, as a brand, and as one of streaming’s most critical hubs of independent cinema.
Hulu has a long and storied history, but the short(-ish) version is this. In 2007, Hulu launched as an aggregate service for recent episodes of network television, launching a subscription service (originally Hulu Plus) three years later. It was a joint venture between many of the major network TV players, and by 2019, was divided between News Corporation (Fox), Comcast (NBCUniversal), and the Walt Disney Company at 30% each, with another 10% held by AT&T (Warner Bros.). When Disney acquired the bulk of Fox’s assets in 2019, the combined 60% stake gave them operation control over the service; AT&T quickly sold their stake, while Comcast agreed to become a silent partner and sell its shares by 2024.
By this time, Hulu’s free service was long gone and the platform was now a full-fledged streamer, one of the three core online-only players of the time alongside Netflix and Prime Video. As Disney geared up to launch the long-touted Disney+ service, pitched as a permanent hub for all of the company’s iconic homegrown and acquired brands, Hulu became an oddly natural partner service, hosting the Disney assets that just didn’t fit that micromanaged Disney name. Accordingly, the company began to beef up the presence of movies from 20th Century Fox and Searchlight, TV series from FX and FXX, and family-unfriendly franchises like Predator and Alien.
The results, overall, have been largely favorable for Hulu as an individual service. In particular, the TV originals side of things benefited; previously known primarily for just The Handmaid’s Tale, Hulu can now boast of carrying the likes of The Bear, Only Murders in the Building, Reservation Dogs, Dopesick, The Dropout, and more. Largely speaking, these helped Hulu survive the loss of NBC networks’ content to Peacock, and reflected a Disney with a vested interest in keeping Hulu a force in the streaming world.
The film side of Hulu faced different challenges, and found different solutions. At the time of the Disney acquisition, the bulk of Hulu’s “big ticket” movies came courtesy of a deal with Epix, which gave them access to recent films from Paramount, Lionsgate, and MGM. Lionsgate had just pulled out of Epix, but Hulu managed to snag the exclusive rights to their 2020-2021 films in what should have been a savvy move. Unfortunately, that blew up in Hulu’s face, as the COVID-19 pandemic severely shrank Lionsgate’s slate to the point where Hulu got almost nothing out of it. The blow would be compounded in 2022, when Amazon, having acquired Epix (later rebranded MGM+) in their purchase of MGM, abruptly ended the network’s deal with Hulu, causing a huge portion of the service’s films to disappear overnight. Meanwhile, a longstanding deal with HBO prevented any new theatrical films from 20th Century Studios and Searchlight from reaching Hulu for many years, and a deal struck with HBO in late 2021 only partly alleviated the issue.
So what do you do when your service is struggling to get many big films? Get a lot of quality smaller films. In recent years, Hulu has acquired first-window rights to a murderer’s row of minor-league distributors, such as Roadside Attractions, IFC Films (currently shared with AMC+), Magnolia, Samuel Goldwyn Films, and, most famously, NEON, with whom Hulu has shared a close partnership (including jointly acquiring the film Palm Springs). This has made Hulu a pivotal hub for recent indie cinema, all the moreso as Searchlight migrates fully into its ecosystem.
The result is a Hulu that feels like it has a unique, somewhat eccentric identity, a home for odd movies and odd shows, and serves as a refreshing contrast to the packaged-and-sanitized vibe of its corporate sibling Disney+.
And now, it may end up losing that identity to help pay for Disney+’s sins.
So here’s the thing about Hulu as a counterpart to Disney+ — that doesn’t apply anywhere in the world outside the United States.
True, the Hulu name was licensed to a service in Japan, which was subsequently acquired by local giant Nippon TV. But that service is functionally completely different from the American Hulu, and ultimately, Hulu never expanded anywhere else in the world. As Disney began to realize they needed a home for their less Disney-esque media, they found the Hulu name had little appeal in other countries, so they instead took a new approach.
Using a name acquired through the acquisition of Fox’s Indian assets, Disney created the Star hub. Star, contained within Disney+ itself, would serve as a catchall for productions that fell outside the scope of the service’s core brands. It debuted in 2021, less than two years after the initial launches of Disney+ began, and has generally appeared to be a smooth integration. It’s now a common sight to see Disney+ subscribers outside the United States express confusion online at the lack of adult-oriented content on the U.S. service, not knowing that, until now, there was a whole separate platform for those.
(As a side note, a few countries have had licensing issues that led Disney to create separate “Star+” services, which also include live sports. That led to more legal pain when Starz understandably took issue with the name; it was resolved through an arrangement where Disney and Starz have begun to offer streaming bundles together in Latin America.)
On the surface, one might look at “Hulu on Disney+” as simply bringing the Star hub to America under a more familiar name. But there’s some critical differences here, a key one being third-party content. While Disney has indeed made a lot of effort to insert more and more of itself onto Hulu since the acquisition, Hulu is a service built on, and still carrying a massive amount of, movies and series from outside the Walt Disney Company. In contrast, Star is specifically a hub for Disney-owned media. For example, right now on Disney+’s Hulu hub, you can watch the entirety of Warner Bros.’ The Matrix series. There’s no Star hub in the world with that.
Perhaps even more important, though, is the reason for that difference. Whereas Star was constructed specifically for Disney+ services outside the US, the Hulu on Disney+ hub is far more comparable to this year’s other streaming service megamergers – specifically Max, which swamped the former HBO Max with the Discovery+ library, and Paramount+ with Showtime, which transformed the Showtime cable channel into Paramount+’s premium-priced streaming tier. Like HBO and Showtime, Hulu is an older brand that’s being repositioned as a content feeder to support a service that the new corporate owners (with Disney filling in for Discovery and Paramount) are more invested in seeing succeed.
It’s a turn of events that might come as a surprise for those less invested in the minutiae of the streaming business. Aside from getting caught up in Disney’s mass deletion sprees, which infamously and unceremoniously purged the likes of Marvel’s Runaways, The Princess, and Looking for Alaska from the service, Hulu has had a fairly uncontroversial year compared to a lot of streaming services. More significantly, it’s had a lot of positive attention, between acclaimed new seasons of The Bear and Only Murders in the Building, to a revival of the cult classic icon Futurama, to splashy premieres for movies like No One Will Save You. If Hulu’s on a hot streak, why suddenly try squishing it into Disney+?
Simple: Disney+ needs it.
Since its launch, Disney+ has acquired something of a notoriety for its stagnancy as a service. Once the novelty of having Disney’s classics available year-round all in one place wore off, the service had comparatively little in the way of carrots to dangle for potential new subscribers. Shows like The Mandalorian, WandaVision, Loki, and Andor all came from the same two franchises (Star Wars and the Marvel Cinematic Universe), and efforts to reach beyond those two core brands have been met with ho-hum responses. As prices increase, Disney+ needs to diversify its appeal in order to stay relevant – and adding Hulu’s successful, dynamic library accomplishes that, regardless of whether Hulu and Disney+’s vibes mesh (they don’t).
In addition, Disney+ had long pitched itself as an ad-free service, in stark contrast to Hulu, which was one of the few services to be ad-supported from the beginning. Now, the service is in dire need of ad revenue. For those used to the traditional Disney bundle, which featured ad-free Disney+ and ad-supported Hulu, incorporating Hulu into Disney+ normalizes the sight of ad breaks on Disney+, potentially goading subscribers fed up with increasing prices for no ads to accept a lower-cost ad tier, rather than abandoning the service entirely.
Finally, it’s what investors are expecting. After a little bit of wavering, in late 2023, Disney committed itself to buying out Comcast’s stake in Hulu for a hefty chunk of change, a dramatic spend Disney can’t afford to waste given its difficulties over the past year. Under both Bobs (Iger and Chapek), Disney+ has been the company’s key to spurring investor excitement in tough times, and with the downturn in streaming’s Wall Street fortunes of late, Disney can’t afford for investors to think the service is in trouble. Thus Hulu, now fully under Disney’s ownership, must do its part to support the Disney+ mothership.
Right now, Hulu on Disney+ requires a separate Hulu subscription to access anything available through the beta. However, that will presumably change when the “full” launch occurs in March 2024. But when that day comes, what will happen to Hulu itself?
For the time being, Hulu as a standalone service is likely here to stay. The principal reason for that is Hulu with Live TV, a whole separate side of Hulu’s business that gives cord-cutters access to linear broadcast and basic cable channels. Disney doesn’t seem interested in adding that to Disney+, but it’s revenue they need, so it’s not going anywhere for now.
Furthermore, Hulu on Disney+ does not encompass the entirety of Hulu’s library. To be sure, despite fears and talk that Disney was planning to purge third-party licensing deals, a hefty chunk of Hulu’s third-party films and shows made it to Disney+, to the point where the Hulu hub has its own set of hubs within it. (And leads to the ironically amusing situation of Animaniacs, starring the Warner siblings, being available on Disney’s flagship service rather than Warner Bros. Discovery’s.) But, at present, there’s also quite a lot missing, and Disney’s marketing is now making clear that Hulu on Disney+ is merely a “selection” of the full Hulu service.
Perhaps the most notable omission is that of NEON, which is a blow given just how prominent NEON has become in the indie landscape – possibly the only true competitor to the memetic popularity of A24. On Hulu proper, you can watch the likes of Infinity Pool, How to Blow Up a Pipeline, Crimes of the Future, Petite Maman, and recent Best Picture nominee Triangle of Sadness, but those are nowhere to be found on Disney+. Why this is the case is unclear, but it’s likely the result of a licensing issue or a failure to come to an agreement. Could this be resolved in time for the full launch in March? Quite possible, but it still feels unlikely we’ll see everything on Hulu reach Disney+ (particularly movies from IFC and RLJE Films, as AMC probably knows those films reaching Disney+ could deal a harsh blow to their efforts to promote AMC+).
In any case, a willingness to launch the Hulu hub without important indie titles betrays a sense that Disney+ will see them as inessential going forward. The more that Disney+ tightens its coils around Hulu as a brand, the more likely it is we’ll see Hulu become more and more like Star, with Disney-owned media emphasized above all else and Hulu’s eclectic identity fading away. Disney may not yet have followed through on its suggested plan to ax existing deals with third-party studios, but that doesn’t mean it will renew them when the time comes, or that those studios will want to renew with a company treating them as disposable assets. A24 jumped ship from Showtime after that network became part of the Paramount+ machine; will NEON do likewise for Hulu? And if so, can Hulu possibly hope to maintain its current identity?
To put the question another way, is Hulu’s standalone service doomed to become the new Cinemax — a once-thriving and identifiable network stripped for parts and left for dead at the behest of management that wanted to put all their eggs in one basket?
In an ecosystem increasingly defined by megacorp-owned streamers centered around their stable of intellectual property, the loss of Hulu as a hub for indie-distributed films would be a harsh one. But there’s room for hope. In particular, Disney has talked about the potential to sell streaming licenses for non-core brands (read: movies and shows from former Fox studios, e.g. 20th Century) to competing services. In that case, in order for Hulu (both on and off Disney+) to remain a viable brand of its own, those third parties will be very much needed to fill in the gap. It would make for a very confusing brand identity for Disney+, but it would arguably be the only path for Disney to effectively get value out of both Hulu as a name and the 20th Century/Searchlight titles as desirable commodities.
There’s a lot still up in the air at this point, and as we get closer to the full launch in March, it is likely Disney’s plans for Hulu, both as a standalone service and as part of Disney+, will come into better focus. But the picture that the beta launch paints for Hulu going forward is a messy and uncertain one.
