Not long after the news hit that Disney gained operational control of Hulu, with Comcast slated to be bought out by 2024, Disney CEO Bob Iger described the deal as part of a grand “pivot” years in the making.
The executive spoke at the MoffettNathanson Media & Communications Summit in New York, on the same day that Disney makes its pitch to advertisers at Lincoln Center.
Iger said controlling Hulu (through a put/call arrangement with Comcast that will see Disney formalize a buyout by 2024) immediately will yield benefits across programming, distribution, advertising and technology. BAMtech, the former Major League Baseball streaming outfit Disney took control of in 2017, will soon be the backbone of Hulu, Iger confirmed.
How The Disney Marketing Team Revitalized The MCU With 'WandaVision', 20 Months After 'Avengers: Endgame'
The valuation of $27.5 billion in 2024 dollars was “justifiable,” Iger said, given the strategic imperatives of putting more owned programming on Hulu, expanding it internationally and bundling it with Disney+ and ESPN+.
The primary benefit of controlling Hulu is “being able to leverage the content engines the company already has,” Iger said. “We will have an extremely large and successful television studio – there is huge opportunity there.” He singled out FX, saying teams are already working on programming initiatives. (FX chief John Landgraf on Tuesday reciprocated the enthusiasm, affirming that Hulu would be a more appealing streaming home than any kind of stand-alone service.)
Moderator Michael Nathanson asked Iger about the company’s current view of the pay-TV bundle given its all-out push into streaming. (Disney+ will launch in November and ESPN+ has drawn more than two million subscribers in a little more than a year in the marketplace.)
“Today, the bundle is still an important part of our business,” Iger said. Nevertheless, “there’s much more competition in the world today for people’s time and money. It’s not competition that comes just from Netflix. It’s competition that comes from many, many different directions. When you look at what people are spending their money on today, and the fact that people demand a high price-to-value relationship, when they look at a 150-plus-channel package and they realize they’re buying a lot of channels that they may never find or may not have any interest in watching. I think today’s consumer doesn’t look as positively at that as they once did. … It’s just the way of the world.”
Iger emphasized that the company’s streaming foray is not meant to be an assault on traditional models, however. “We’re not purposely trying to do anything to damage the bundle, because it still has a lot of value,” he said. “But there’s a reality that exists that we had to come to grips with. And not just come to grips with it by basically saying that it exists but by doing something about it.”
He added, “We’re prepared to pivot in a new direction … and we’ll see what happens.”
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.