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Disney Reportedly Considering Selling Hulu Says CEO Bob Iger

In an interview with CNBC’s David Faber, Disney CEO Bob Iger addressed the potential sale of its streaming service Hulu, in which the Walt Disney Company currently holds a two-thirds stake.

The motivation for this decision comes in the wake of the Company’s Q1 Earnings Report released yesterday, which confirmed its Direct-to-Consumer division’s operating loss increased by 78%. Specifically, it totaled around $1.05 billion due to higher operating costs for the Disney+ platform’s technology and programming and lower ad revenue for Hulu. Furthermore, negative reactions to the introduction of an ad-based streaming tier, increased costs for Disney+’s ad-free basic subscription, and the loss of approximately 2.4 million subscribers worldwide over three months near the end of 2022 have hit the DTC division hard.

Bob Iger

Credit: NPR

RELATED: In the Midst of Streaming Success, Disney+ Loses Millions of Subscribers

Of course, since Disney launched its own streaming service with original content in 2019, while subscriber counts continued to grow until this year, the investment will not be profitable until at least the following fiscal year, 2024. Additionally, the brand has come under fire for certain controversial elements within its content, notably the conservative backlash towards Strange World (2022), now available on Disney+.

In fact, negative opinions regarding the story’s diverse cast and same-sex relationship resulted in one of the lowest audience scores ever for a Disney film and a disappointing theatrical run, along with similar vitriol towards the Disney+ original The Proud Family: Louder and Prouder due to so-called “anti-white” messaging in an episode on the African American holiday Juneteenth.

Strange World

Credit: Disney

RELATED: Fans Upset and Accuse Disney of ‘Anti-White’ Propoganda Due to Proud Family Episode

Regarding Hulu, the media distributor was recently sparred the same fate when Hong Kong laws forced Disney to remove an episode of The Simpsons from Disney+ but not Hulu for Chinese viewers. Even so, Iger says he remains “open-minded” about selling Hulu to Comcast CEO Brian Roberts, whose company owns a one-third stake worth billions of dollars, according to Deadline.

Moreover, Comcast and Disney apparently hold a put/call agreement, which can require Disney to buy out the remaining Comcast stake or require Comcast to sell it as early as January of next year to the tune of a guaranteed $27.5 billion total equity value. When asked, the Disney CEO who replaced Bob Chapek told CNBC:

Everything is on the table right now, so I am not going to speculate whether we are a buyer or a seller of it. But I obviously have suggested that I’m concerned about undifferentiated general entertainment, particularly in the competitive landscape that we are operating in, and we are going to look at it very objectively and expansively.

Disney Bundle

Credit: Disney Plus

RELATED: How Disney Dominated Streaming in 2022

Certainly, being paid out for its share is preferable to buying out its competitor for full ownership of Hulu, especially as Iger and his newly restructured organization refocus on Disney+’s profitability and the success of its newly announced theatrical releases, along with Disney Park’s 100th-anniversary celebrations amidst rising theme park costs and Cast Member dissatisfaction.

Disney fans and subscribers will have to wait until 2024 to see what both companies decide, getting their watch on in the meantime for all of Hulu’s Disney-owned titles.

 

About Spencer Johnette

Spencer is a lifelong lover of theme parks, princesses, and Disney history that recently relocated to Northern California. She completed her undergraduate studies at UCLA, where she was the founder and first president of the campus Disney Club. A former Cast Member still mourning the loss of the Disney Store, she now haunts the Walt Disney Family Museum halls and shares her opinions with anyone who will listen @gothelsflower.