The Walt Disney Co. is currently in talks with Comcast Corp. to purchase its 30 percent stakes of Hulu, according to CNBC. It is claimed that the conversations are still private, and the parties familiar with the matter prefer to remain confidential.
Disney bought 21st Century Fox for $71.3 billion on March 20. With this purchase, Disney not only increased its assets vastly, but also received another 30 percent worth of Hulu shares that used to belong to Fox.
After buying Time Warner, AT&T Inc. recently sold its shares of 9.5 percent to Hulu itself for $1.43 billion, due to plans of Warner Media releasing its own streaming service. The shares sold by
AT&T will be divided equally between Comcast and Disney, the only two remaining owners of Hulu.
Disney’s total of 60 percent of the stakes, plus half of the shares coming from the AT&T purchase, makes the company the biggest stakeholder of Hulu against Comcast. Only a few months ago, Comcast and Disney owned equal shares of Hulu.
If Comcast decides to sign the deal to sell its shares, Disney will become the only owner of Hulu.
In 2018, Hulu lost around $1.5 billion, up from $920 million a year earlier, according to Comcast’s most recent 10-K filing, Variety.com reported.
The loss of Hulu strengthened the rumors that Comcast will speed up the deal with Disney to sell its shares.
Disney lost $580 million in equity investments for Hulu, and $469 million from BAMtech, the streaming technology powering ESPN+ and other services, according to CNBC.
However, Disney is preparing to launch its own streaming network Disney+ this November. It is expected to create big competition against Netflix, costing only $6.99 monthly against Netflix’s prices ranging from $7.99 to $15.99 for new subscribers.
This new streaming service will give Disney power to remove some of its popular content from Netflix and attract a greater audience for itself.
It is also expected that Disney may bundle Hulu with Disney+ and ESPN+.
“We’re still assessing the prospect and timing of international launches, which would have an impact on our financial outlook for Hulu,” Disney Chief Financial Officer Christine McCarthy said at an investor presentation.
If the Hulu service expands internationally, it might start to bring profit rather than loss in a few years.
Disney already owned many media companies before buying the 21st Century Fox, ESPN, ABC Studios, Pixar, National Geographic, Marvel and Lucasfilm to name a few.
However, with the 21st Century Fox merge, Disney now holds the right of Fox’s entire TV and film libraries too; this means Disney now owns Marvel characters that Fox held full or partial rights of, such as Deadpool, Quicksilver, the X-Men, the Fantastic Four and Scarlet Witch.
Only a few days after Avengers: Endgame movie came out, it grossed over $1 billion worldwide according to box office data, meaning that Disney is gaining a remarkable profit as the owner of the record-breaking movie.
Even though Disney’s streaming services have not yet made a satisfactory profit, the media corporation’s recent massive growth and profits rose questions of whether this situation damages the market competition.
