Disney to unify Hulu and Disney+ content in one app

Disney CEO Bob Iger announced Wednesday that content from Hulu and Disney+ will be offered in a unified app in the US. At the same time, Disney will keep selling and supporting its premium streaming apps on a standalone basis.

The move shows that Disney is looking to use its scale and giant content library to cover everyone from niche sports fans to large families and everyone in between.

Disney expects to offer the Hulu/Disney+ combo – a "one-app experience," as Iger called it – before the end of 2023.

"While we continue to offer Disney+, Hulu and ESPN+ as standalone options, this is a logical progression of our DTC [direct-to-consumer] offerings that will provide greater opportunities for advertisers, while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience," Iger said on today's earnings call. "The advertising potential of this combined platform is incredibly exciting," Iger added.

Figure 1: Disney expects to offer Hulu and Disney+ content in a 'one-app experience' in the US before the end of 2023, Disney's new/old CEO Bob Iger said.
(Source: Imaginechina Limited/Alamy Stock Photo)

Disney's decision to combine Disney+ and Hulu content in a unified app enters the picture roughly a month after Warner Bros. Discovery (WBD) introduced "Max," a super-sized streaming service that will combine HBO Max with Discovery+. The May 23 launch of Max will lead to the phasing out of the HBO Max service launched about three years ago. WBD will continue to sell Discovery+ on a standalone basis and HBO will become a "privileged" brand featured prominently within the new and larger Max service.

Hanging on to Hulu?

Disney's plan also signals that the company intends to move ahead with a transaction that will give it complete ownership of Hulu. Disney owns 66% of Hulu, with Comcast/NBCU owning the rest. A path has been set for Comcast to unwind its Hulu stake in 2024.

However, Comcast Chairman and CEO Brian Roberts has expressed an interest in shifting gears and making a play for all of Hulu.

"I believe if [Hulu] was up for sale, put up for sale, Comcast would be interested – so would a lot of other tech and media companies, Roberts said last fall at an investor conference. Meanwhile, Disney has been coy about whether it would ultimately be a buyer or seller of Hulu.

Streaming sub update

Disney's coming moves also come as Disney struggles to find growth for Disney+, a streaming home of the popular franchises of Star Wars, Pixar, Marvel and National Geographic. Disney+, which offers ad-free and ad-supported service tiers, lost about 4 million subs worldwide in its fiscal second quarter of 2023, ending the period with 157.8 million. Disney+'s base in the US and Canada was cut by about 300,000, ending the quarter with a reach of 46.3 million subs. The average revenue per user for domestic Disney+ subs rose 20% to about $7.14.

Hulu added 200,000 subs in the period, for a total of 48.2 million (43.7 million subscription VoD-only subs and 4.4 million Live TV+SVoD customers), while ESPN+ added 400,000 subs, for a total of 25.3 million.

Disney said DTC revenues for fiscal Q2 rose 12% to $5.5 billion, with operating losses dropping $200 million to -$700 million. That loss reduction comes as media giants focus more on streaming profitability and less on growing their subscriber bases at all costs.

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— Jeff Baumgartner, Senior Editor, Light Reading