New reports suggest that Disney is planning to buy out WarnerMedia's stake in Hulu. The SVOD service was originally founded in 2007, and investments were eventually split between Disney (30%), 20th Century Fox (30%), Comcast (30% ) and WarnerMedia (10%). With Disney's acquisition of Fox tentatively coming to finalization within a month, acquiring the shares held by WarnerMedia, which was acquired by AT&T, would give the company 70% control over Hulu.
Hulu began as a distributor of streamed film and television content from its shareholding media conglomerates. However, it's since gone on to produce a line-up of successful original comedies and dramas, such as The Handmaid's Tale, Difficult People, and the later seasons of The Mindy Project. The service offers a range of live TV and SVOD options, and even recently expressed an interest in picking up the Netflix Original Marvel television series, after their much-protested cancellations. As Disney's homemade streaming service Disney Plus comes closer to launch, several Walt Disney, Star Wars, and Marvel properties are rumored or confirmed to be getting their own series on the new platform. Buying out WarnerMedia's share in Hulu would amount to new implications about the House of Mouse's ongoing strategy.
Variety reports Disney and AT&T are currently in talks to sell off the shares. The AT&T and Time Warner merger also recently won in the last appeal made by Department of Justice against the deal. Disney had previously approached Comcast about selling their shares as well. NBCU CEO Steve Burke stated: “I don’t think anything’s going to happen in the near term."
For AT&T, the Hulu resale may be the next step in moving investments toward WarnerMedia's upcoming productions and services, such as its own unnamed streaming service. Disney had previously estimated Hulu's overall value to be 9.296 billion. At 10% held, WarnerMedia's share then projected to be worth $930 million would amount to a 16% increase from the $583 million they originally invested in 2016.
While Hulu absorbed greater losses last year, reportedly due to costs associated with its live TV infrastructure, it still possesses a significant opportunity for Disney to compete with Netflix in the streaming market. The defending champion of SVOD has maintained its streak of developing and methodically executing high-quality shows and movies that achieve international acclaim, and help minimize subscriber churn, as per recent hits like The Umbrella Academy and Russian Doll. For Disney, increasing their investment in Hulu may mean more access to an environment in which SVOD has already been rigorously tested, and ensuring that all their properties, including those acquired from Fox, are optimally targeted to subscribers.