Drama linked to the fate of Hulu flared up this week as Comcast's CEO said he'd explore buying Hulu if such an opportunity arose. Meanwhile, the CEO of Disney, the company that controls Hulu, said Comcast would need to offer "reasonable terms" for Disney to accelerate its purchase of Comcast's remaining stake in the streaming service.
Disney currently owns 66% of Hulu, with Comcast/NBCU hanging on to a 33% stake. A path has been set for Comcast to unwind its Hulu stake in 2024. Effectively, Comcast can force a sale of its stake to Disney, and Disney can force Comcast to sell its stake.
Speaking Wednesday at the Goldman Sachs Communacopia and Technology Conference in San Francisco, Comcast Chairman and CEO Brian Roberts signaled that Comcast would consider going the other way and try to acquire all of Hulu, if that ever became an option. Hulu, he suggested, could generate a "robust" auction if Disney were to take that path.
"I believe if it [Hulu] was for sale, put up for sale, Comcast would be interested – so would a lot of other tech and media companies," Roberts said.
He also heaped some praise on Hulu, a streaming service that sells both subscription VoD services and pay-TV packages. "Hulu is a phenomenal business," Roberts said. "Its scale is fantastic. It has wonderful content."
At the end of Disney's fiscal Q3, Hulu had 42.2 million SVoD subs and about 4 million pay-TV subs. Variety reports that Disney has pegged Comcast's interest in Hulu as being worth $8.6 billion as of July 2, 2022, implying a total valuation of $25.8 billion.
Roberts was pressed on whether interest in buying all of Hulu is genuine or merely theoretical. "That question's up to Disney," he said. "Either way, the value of 100% of Hulu is what we're entitled to. But if it were for sale, we certainly – and I think others – would also want to get into that opportunity. I think our position is very enviable."
Roberts' real or theoretical interest in acquiring all of Hulu appears to be moot, as Disney CEO Bob Chapek reiterated Disney's desire to own 100% of the streaming service and to accelerate its acquisition of Comcast's remaining stake prior to the 2024 deadline.
"We would love to get to the endpoint earlier, but that obviously takes some level of propensity for the other party to have reasonable terms for us to get there. And if we could get there, I would be more than happy to try to facilitate that," Chapek said at the same conference.
'A lot of flaws with fixed wireless'
A good portion of Roberts' discussion at the Goldman Sachs investor event focused on broadband, a centerpiece of Comcast's business and an area under pressure after the company, for the first time, did not gain broadband subs in the second quarter of 2022.
Roberts pointed out that Comcast added a whopping 3 million broadband customers during the pandemic, noting that there was a "pull forward" in demand for services as people worked and schooled from home.
But he also acknowledged that Comcast is facing more competition from fixed wireless and fiber.
Comcast, which is in the process of delivering multi-gigabit speeds on its hybrid fiber/coax (HFC) network in 2023, has competed against fiber for years. But fixed wireless access (FWA) options are newer and have enjoyed some solid success early on.
Roberts indicated that Comcast is preparing to put out some marketing that will blow some holes in FWA, drawing comparisons to Comcast's past campaign against DSL – The Slowskys – that used a family of turtles to take jabs at DSL's syrupy-slow speeds.
"We see a lot of flaws with fixed wireless," Roberts said. He didn't elaborate, but the general dig against FWA is that it will have difficulty scaling as data usage continues to climb and puts pressure on spectrum being used to underpin more lucrative mobile services.
Roberts didn't detail what kind of marketing campaign Comcast has in mind, but said that the company intends to play up the reliability and speed of its own broadband service and how that stacks up against FWA "pretty soon."
Though residential broadband subscriber growth (net adds) is not currently in the cards at Comcast, Roberts said there are other ways to expand that part of the business, including average revenue per user (ARPU), business services and combining wired broadband with wireless.
Touching on the wireless angle, Roberts reiterated that Comcast only sells Xfinity Mobile to its broadband base, and referenced a new mobile pricing structure centered on multi-line unlimited accounts aimed at attracting more customers to the broadband/mobile combo. Comcast added 317,000 mobile lines in Q2 2022, extending its total to 4.61 million.
"I think wireless is absolutely going to be a growth engine," Roberts said.
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— Jeff Baumgartner, Senior Editor, Light Reading