Disney Should Not Compete Against Hulu It Should Become It

Hulu on Smart TV

Disney finally rolled out the cable free ESPN option in April. The company had teased the service for over a year along with a Disney based streaming service. Disney should not compete against Hulu. What it should do is build on Hulu.

Hulu Is Really Catching On

The latest reporting on Hulu is that the service has 20 million subscribers. No, that is not as many as Netflix. But it is a lot more than many streaming services have. It is probably more than every single skinny bundle service has combined. 20 million subscribers are also far more than any numbers reported for competitor CBS.

Disney Could Own Most Of Hulu Soon Enough

Disney already owns 30% of Hulu. The rest of the ownership is broken up amongst Fox/Newscorp 30%, Comcast/NBC 30% and Time Warner 10%. But if the Fox Disney Merger goes through that will give Disney 60%. Nobody says that the company can’t choose to buy out Time Warner’s share. For content acquisition sake as well as a way to tamp down the competition it may well prove to be much easier to keep Comcast in the partnership. Otherwise, it may play hardball with its content.

So Much Disney Content is Already On Hulu

Disney puts all of its primetime content from ABC on Hulu. Disney Channel, Disney XD, Disney Jr. There are also a number of Disney movies available. The talk around the new Disney streaming service is that it will include content that will drop off of Netflix once the contracts between the two entities end. It will also include originals that build off Disney’s brands.

It’s hard to build a service

HBO Now (the cable free option for HBO) does not have 20 million subscribers. Other than the two leaders, Amazon and Netflix, no other streaming service has announced numbers along those lines. Is it worth it to compete with its own property in order to build something very much like it? Wouldn’t it be so much easier to buy out a few partners and keep the train rolling with Hulu? Disney should go ahead and pull the Disney movie content from Netflix. It could also be a smart move to pull archived episodes of Disney owned shows from the streaming competitor as well. But all of the Disney based content on Netflix which includes many popular currently airing series from both ABC and Fox does not an entire service make. On the other hand, adding that content to Hulu greatly increases the appeal of the service to the point where a number of people would consider keeping both Netflix and Hulu. It would basically mean that the majority of major network content is exclusive to Hulu while Netflix would be the home of likely over 1000 original programs and a metric ton of other content. Despite the fact that Disney is expanding on the Star Wars Universe and Marvel Universe, we are only talking about 30 or more films at the moment. It will grow of course. Hulu could even raise prices like its larger competitors.

Disney Does Not Need to Pour Money into another Brand.

three movie studios, 5 TV networks, 1 streaming news network, a dozen or more theme parks, a cruise line, islands. Does Disney need one more property to manage in an age where ESPN is hurting? Maybe it has a plan that will not require millions of dollars in advertising to get the new service off the ground so that people understand what it is, why they need it and so on. It just seems like it should continue to build on a winning formula that has been steadily growning for over 10 years. No reason to reinvent the wheel.