Axios Pro Exclusive Content

The fate of Hulu under Disney is unclear

Jul 22, 2022
Illustration of two cartoon hands: one making a thumbs-up, the other making a thumbs-down.

Illustration: Shoshana Gordon/Axios

Disney's decision to add R-rated movies to Disney+ raises questions about its eventual plans for its other entertainment streaming service, Hulu.

Why it matters: The ultimate fate of Hulu is a $27.5 billion question for Disney and a matter that has hung over the heads of executives ever since Disney acquired majority control of the streaming service via its deal for Fox's entertainment assets in 2019.

Driving the news: Beginning Friday, superhero films based on Marvel characters "Deadpool," "Deadpool 2" and "Logan" are available on Disney+.

  • In doing so, they become the first R-rated movies to be added to the family-friendly service. Each film was produced by 20th Century Fox prior to the Disney deal.

The intrigue: Hulu was originally designed to be the home for more mature adult titles it gained from the Fox deal, with Disney+ being more family oriented.

  • But Disney's R-rated move and other maneuvers that it's pulled this year raise questions about Hulu's place as a standalone entity.

State of play: Hulu is currently jointly owned by Disney and Comcast, with Disney being the controlling stakeholder.

  • Per a 2019 agreement, Disney is on the hook to buy out Comcast's 33% stake as soon as 2024 for a minimum of $27.5 billion.
  • Disney initially had bigger plans for Hulu which included an international rollout but scrapped that in favor of its Star brand, another acquisition from Fox.
  • At the same time, Disney has increased its Hulu investment, and the service helped to lead a record $9 billion in upfront commitments.

What they're saying: LightShed analyst Rich Greenfield argues Disney's moves make the case it should sell Hulu to Comcast to pair it with Peacock, rather than buy out Comcast's stake.

  • "Could this be a sign that Disney is willing to sell @hulu to Comcast and make @disneyplus a service for everyone?" he tweeted Thursday.
Go deeper