Disney to invest in more original content for Hulu, expand service internationally

In addition to plans to launch its own Netflix rival, Disney+, next year, the company says it also plans to increase investment in its other streaming service, Hulu. Thanks its buyout of 21st Century Fox, Disney now own 60 percent of the TV streaming service, which it gives it “considerable say” in how Hulu is run, noted Disney chairman-CEO Bob Iger on this week’s earnings call with investors. He said the plan now is to invest in more original content for Hulu and expand the service internationally.

Disney would also be open to acquiring more of a stake in Hulu, the CEO later said.

Disney sees the value in both Hulu’s IP and talent, particularly on the television and movies side, Iger told investors. And it plans to use the television production capabilities of the now combined company to “fuel Hulu with a lot more original programming,” he added. This, Disney believes, will help make Hulu more competitive in the marketplace.

“Given the success of Hulu so far in terms of subscriber growth and the relative brand strength and other things too like demographics, we think there’s an opportunity to increase investment in Hulu notably on the programming side,” Iger said.

Currently, Hulu has had only a handful of breakout original hits – most notably, the timely dystopian spectacle that was  “The Handmaid’s Tale.” But its originals output has paled in comparison with Netflix, which projected it would spend $8 billion on content this year, with plans to increase that in 2019. Hulu has spent considerably less – around $2.5 billion, per analyst estimates.

With Fox, however, Disney gains access to the Fox studio and FX, and more, which will help it fuel Hulu with more original content. Iger declined to say if that content would be exclusive to Hulu in the future, but did confirm the studios are part of Disney’s plans for Hulu.

Iger also spoke of other changes ahead for Hulu, including possible adjustments to Hulu’s pricing, and its plan to bring Hulu to more international markets.

“After the deal closes and after we have the 60 percent ownership, we’ll meet with the Hulu management team and the board, and discuss what the opportunities are in terms of both global growth and investing more in content. But that’s something that we have to do after the deal closes,” Iger added.

The acquisition is expected to close in 2019.

In a follow-up interview with CNBC, Iger also said that Disney would be interested in acquiring more shares of Hulu, if the opportunity arose.

“It is premature really except to say that if Comcast is interested in divesting, or if Time Warner or AT&T Time Warner is interested in divesting, we certainly would be interested in buying their stake. But with 60%, which is what we will own, we’ll have enough control to manage Hulu in a way that is consistent with – the strategy of the company is deploying,” he said.