Disney+ and Hulu to combine content in single US app in to stem losses

Disney+ and Hulu to combine content in single US app in to stem losses

12 May    Finance News, News, Technology

Disney has announced plans to combine content from its Disney+ and Hulu streaming services in the US.

The move comes after Disney+ lost four million subscribers in the first three months of the year, and the firm is under pressure to make its streaming business profitable.

The home of Mickey Mouse, Star Wars and Marvel movies intends to link Hulu and Disney+ into a “one-app experience”.

Plans for the app have met with a mixed reaction from current subscribers.

Some voiced fears on social media that it would lead to higher subscription fees when it goes live at the end of the year.

However, the company said that Disney+ and Hulu, as well as its ESPN+ platform, would also continue to be available as standalone services.

Hulu, jointly owned by Disney and NBCUniversal, is known for television shows pitched at adults, such as The Handmaid’s Tale.

Disney chief executive Bob Iger told investors on Wednesday that he has had “cordial” talks with NBC’s parent company, Comcast, about taking full control when the current ownership agreement expires next year.

“I can’t really say where they end up, only to say that there seems to be real value in having general entertainment combined with Disney+,” Mr Iger said. “If ultimately Hulu is that solution, we’re bullish about that.”

Since returning to Disney last year, Mr Iger has been focused on improving the firm’s financial performance – especially at Disney+.

Losses at the streaming business were $659m in the first three months of the year, down from $1.1bn in the previous quarter.

But the fall in subscribers was bigger than expected, sending shares in the company down about 5% in after-hours trading in New York.

Most of the losses came from its Hotstar service in Asia, which lost streaming rights to Indian cricket matches last year.

Disney+ also lost around 300,000 customers in the US and Canada after raising subscription prices.

Mr Iger said the improved financial performance reflected “the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success.”

He previously said Disney+ had reached a “turning point” and would become profitable by next year.

Earlier this year, the entertainment giant reported its first fall in streaming subscriber numbers and announced plans to cut 7,000 jobs.

The latest announcement comes after thousands of Hollywood TV and movie screenwriters held their first strike in 15 years last week.

They are calling for better pay and working conditions as the transition to streaming has upended the traditional television and film industry.

The last writers’ strike was in 2007. It lasted 100 days and cost the industry an estimated $2bn.

On Wednesday, Disney’s chief financial officer Christine McCarthy declined to put a figure on how much the latest strike could cost the company.

The walkout has already shut down several Disney projects, including those set to run on Disney+.

Disney has poured billions of dollars into its streaming platforms in recent years, transforming it from a company rooted in traditional television, movies and theme parks into one of the streaming industry’s major players.

It now has a total of more than 231 million subscriptions across its three streaming platforms, which also include the sports-focused ESPN+ and wider entertainment site Hulu.

Disney+ has close to 158m subscribers around the world, although that is still behind rival Netflix’s 232.5m subscribers.

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