Disney tests app that ties together Disney+ and Hulu

The Walt Disney Company has begun to put Disney+ and Hulu content under the same roof amid a broader bundling trend that is taking hold in the world of premium streaming services.

Disney announced this week it has begun to beta test an app that unifies Disney+ and Hulu's subscription VoD library. Focused on customers who take the Disney streaming bundle (Disney+, Hulu's SVoD service and ESPN+), the new unified app is slated to launch commercially in March 2024.

For now, Disney streaming bundle customers will start to see a Hulu tile appear alongside other tiles (Disney, Pixar, Marvel, Star Wars and National Geographic) that have been part of the Disney+ app from the beginning.

Disney will continue to sell Disney+, Hulu and ESPN+ on a standalone basis. Notably, Hulu's SVoD is what's being tucked into the unified app. Hulu + Live TV (Hulu's pay-TV service) and other premium add-ons will remain available only within the standalone Hulu app.

The beta arrives about seven months after the media giant announced its intention to unify Hulu and Disney+ content in one app. It also comes together as Disney pushes ahead to acquire Comcast/NBCU's remaining 33% stake in Hulu.

Steering subs to the bundle

Strategically, the unified app aims to help Disney scale its streaming subscription and advertising business while also reducing churn by providing easier and more streamlined access to a library that's expected to appeal to a broader audience than Disney+ and Hulu can on their own.

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Disney will also use the new unified app to steer standalone Disney+ and Hulu subscribers toward the company's streaming bundle.

The beta launch also enters the picture as Disney – like its peers in the streaming biz – is emphasizing profitability over sheer subscriber growth. Disney's DTC unit posted a loss of -$420 million in fiscal Q4 of 2023, narrowed from a year-ago loss of -$1.40 billion. Disney DTC revenues hit $5.03 billion, up 12% from the year-ago quarter.

"The road to get there requires that we optimize what we have now in terms of content, marketing and user experience, and then monetize it in the best way possible," Joe Early, Disney Entertainment's president of direct-to-consumer, said in a statement.

Disney CEO Bob Iger has called the shift toward a unified app for Disney+ and Hulu a "logical progression" of Disney's direct-to-consumer strategy. "The advertising potential of this combined platform is incredibly exciting," Iger said of the plan earlier this year.

Disney will use the beta period to "better understand the consumer's needs and wants when it comes to Hulu on Disney+ before it officially launches in the spring," Early said. "Beyond unlocking that experience for our existing Bundle subscribers, our hope is to inspire Disney+ and Hulu standalone subscribers to upgrade to the Bundle as well, once they see everything that can be accessed."

Related:Disney's $8.5B check for Hulu stake has cleared, Comcast prez says

Integrating Hulu's SVoD library with the Disney+ app was a complicated technical feat that went well beyond adding a Hulu tile.

"For example, the content libraries between Hulu and Disney Plus – over 70,000 pieces of content – were encoded differently. The playback output had different specifications. The metadata attached to each of those assets was different," Aaron LaBerge, president and CTO of Disney Entertainment ESPN, told Fast Company.