Disney+, Hulu shape Disney's singular content strategy

Disney+ is launching in November. (Disney)

Disney has some important content distribution decisions to make beginning this year as it weighs the strengths of Hulu and Disney+, two key components of its streaming video strategy.

Disney+ is launching in November, and already has a sizable lineup of originals mixed with Disney (and now Fox) library content. Hulu is still owned in part by Disney and Comcast, but Disney now has complete control over the streaming service.

So, the subject of what service gets what content naturally came up last weekend at the Produced By conference, where Agnes Chu, senior vice president of content for Disney+, and Craig Erwich, senior vice president of content for Hulu, sat on a panel together. According to Deadline, Chu brought up a recent conversation that Disney+ had with a documentary team about making exclusive content for Disney+, but also leaving open the door to Hulu if some of the deal’s output would make more sense on Hulu’s platform.

“(We are) just getting started. We are getting to a place where we can have a very fluid conversation across our platforms,” said Chu, according to Deadline.

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Disney is currently producing originals based on existing Disney brands like Marvel, Pixar and Star Wars for the Disney+ service, which will be priced at $6.99 per month when it launches.

In May, Comcast and Disney announced a deal that gives Disney full operational control of Hulu. Per the terms, Comcast as early as 2024 can require Disney to buy its 33% stake in Hulu, and Disney can require Comcast to sell that stake at a fair market value.

But, Disney had been thinking about Hulu’s strategy for months before it officially took control of the business. In 2018, Disney CEO Bob Iger that the expanded studio power Disney will have after buying Fox will be used in part to create more original content for Hulu. He also said that Hulu’s generally younger viewer demographics make it an attractive platform for advertisers.

At a shareholder meeting in April, Disney forecast that Hulu will grow to between 40 million and 60 million subscribers (it’s currently at 28 million) and that Hulu, which has been a significant money loser for Disney and Comcast, is projected to see its operating losses peak this year at $1.5 billion, and then achieve profitability by 2023 or 2024.