Could Hulu really be sold by Disney?

Yesterday Disney chief Bob Iger held his first earnings call since being returned to the big chair last year. A lot of what he said was to be expected by anyone paying attention: Streaming revenues don't bring in as much as cable and linear did, so the transition to the streaming future needs to be carefully managed, and the company will focus less on subscriber numbers and more on the numbers that matter - $$$$$.

Iger also announced an internal restructure which places greater accountability to drive revenue by executives. Disney is now split into three pillars: Disney Entertainment, ESPN, and Disney Parks, Experiences and Products. There will also be 7000 jobs lost as the company restructures itself.

Notably, Disney Entertainment will have two co-shiefs running it: Alan Bergman and Dana Walden. Alan is a film guy, Dana is a TV powerhouse exec.

You can read about those exec appointments here:

What caught my attention was the inevitable question from a journalist on CNBC about Iger's appetite for selling Hulu. Iger's response was non-committal:

“Hulu, by the way, is a very successful platform and I think a good consumer proposition. But everything is on the table right now,” Iger said. “I’m not gonna speculate about whether we’re a buyer or seller of it. But I have obviously suggested that. I’m concerned about undifferentiated general entertainment, particularly in the competitive landscape we’re operating in, and we’re going to look at it very objectively.”

Under a current agreement, Disney are scheduled to buy the remaining ownership stake from Comcast, possibly as early as Jan 2024. But what happens if Disney choose instead to sell off the streaming service?

Outside of the US, all of the grown-up Hulu content is integrated into Disney+. It makes the platform far more compelling for potential subscribers who aren't concerned about Marvel, Star Wars, or the kids-orientated content.

For Disney, one would assume that the question ultimately comes down to the numbers: Would the company lose too great a share of revenue by merging together the platforms from those grown-up subscribers who want mature content alongside the more youthful Disney+ shows & movies? There are billions that can be raised by selling Hulu to a competitor like Comcast (owner of the fledging Peacock) and it would prevent Disney from having to spend a few billion to buy the remaining stake in the company.

The ultimate question: Are those billions in savings worth the competitor advantage Disney has now?

Selling Hulu is ultimately selling off a customer database and a select number of TV shows and movies. Largely Hulu licences most of its content and its biggest exclusive drawcards are FX on Hulu programs - shows that are licensed from the Disney-owned FX. What does Disney really have to lose?

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