Disney may be sandbagging Hulu’s international expansion plans to avoid having to pay more to Comcast, which still owns one-third of the ad-supported streaming service.
According to Bloomberg, Disney has apparently scaled back its plans for Hulu to avoid raising the value of the company and incurring a larger buyout payment to Comcast.
Last year, Disney and Comcast reached a deal to give Disney full operational control over Hulu. As part of the agreement, 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. Disney is guaranteeing a minimum total equity value of Hulu at that time of $27.5 billion.
Hulu has long been subject of reports about expanding internationally. However, Disney now has plans to launch an international direct-to-consumer general entertainment offering under the Star brand in calendar year 2021. Disney CEO Bob Chapek said in August that the offering will rely on the productions and libraries of ABC Studios, Fox Television, FX, Freeform, 20th Century Studios and Searchlight. He said that in many markets, the Star service will be fully integrated into the Disney+ platform from both a marketing and a technology perspective.
“The fact that Disney+ is growing as rapidly as it has both domestically and globally, clearly demonstrates the value of our content, and through the addition of our Star-branded general entertainment offering, we were further extending the value of that content internationally,” Chapek said, according to a Seeking Alpha transcript.
At the end of its third quarter on June 27, Disney said the SVOD version of Hulu had 32.1 million subscribers and Hulu + Live TV had 3.4 million. Average monthly revenue per subscriber for those services reached $68.11 for Hulu + Live TV and $11.39 for Hulu SVOD-only.