The House of Mouse has shown itself to be fearless when it comes to embracing new forms of content viewing—and Disney is set to lose $100 million next year because of that, thanks to Hulu. There has long been an outcry from viewers and consumers for the means to unshackle themselves from pricey cable and satellite subscriptions and a desire for a la carte streaming options. Hulu is the first streaming platform to try that with its Hulu Live service, which is currently in beta testing for users. While it's not quite the pick-and-choose a la carte plan that is the consumer dream, Hulu Live enables viewers to stream live television from a number of select channels for a flat fee of $39.99 per month.
For an industry that finds its audience rapidly moving away from traditional television and onto streaming services, Hulu's live television option just may be where it gains an edge over its competitors. It can't compete with Netflix for sheer amount of original content and it can't compete with Amazon's back catalogue and integration. But it can certainly beat them both to the punch when it comes to live television, and it appears the company is positioning itself to do exactly that.
Hulu's strength and appeal has always revolved around its offering of American broadcast television shows. It hasn't tried to redefine the wheel like Netflix, but has instead leaned into those roots, keeping a traditional ad-based revenue model and distributing television shows after they air. While it has some original content, its appeal hasn't so much been that it's trying to offer something entirely new, but that it's simply offering what's already available to consumers in a more convenient way. Modern audiences still embrace broadcast television content; they simply hate the inconvenience of having to watch it when it airs and exorbitant cable and satellite package price points. Many companies, including Disney, have faith that this model focusing on an old concept packaged in a new way is a viable one, and feel Hulu Live is the future. That doesn't mean the transition will be a smooth one, however.
According to Home Media Magazine (via Cinema Blend), Disney - which co-owns Hulu alongside 21st Century FOX, Comcast, and Time Warner - is reportedly set to lose a whopping $100 million next year with the official launch of Hulu Live. That is a considerable amount of money to lose due to one venture, but if any company can take the hit and shake it off, it's Disney. CEO Bob Iger explained that the loss is a calculated one, as they have every expectation that Hulu Live will prove profitable in the end. But it takes time and resources to build up an audience for any new platform, let alone for a service whose price point is four times higher than the regular Hulu plan, and it makes sense that a full 70% of that $100 million loss will happen in the first fiscal quarter of next year.
Disney, however, is banking on the fact the loss will only be temporary. The early feedback and numbers for the Hulu Live service are encouraging, and Iger pointed to the fact that Hulu's bottom line has drastically increased from 2016 to 2017, bolstered by the breakout success of The Handmaid's Tale. Hulu's series based on the Margaret Atwood novel cleaned up at the Emmys this year, making it the first series from a streaming platform to win the Emmy for Outstanding Drama Series.
This isn't the first time Disney has put its faith in Hulu and its future plans. Earlier this year, Marvel Television head Jeph Loeb explained the decision to partner with Hulu for its Runaways series rather than Netflix, despite Marvel having a cozy partnership with Netflix for the last few years thanks to the success of the Defenders universe. Marvel, as it turns out, felt that Hulu is currently in the position that Netflix was a few years ago as a network that is young and growing and innovative. "It really feels like we're in the right place at the right time with the right show," he said. Only time will tell whether or not Disney's faith in Hulu Live will bear the same sort of successful fruit, but considering the company's track record of savvy partnerships and Hulu's growing foothold in the industry, it seems likely it will be another beneficial deal for both.
Source: Cinema Blend