In a $71 billion-dollar deal, Disney acquired 21st Century Fox, and with that, it also doubled its stake in Hulu, bringing it from 30% to 67%, thus giving The Walt Disney Company complete control over Hulu. This move enabled Disney to further strengthen its position in the streaming industry to take over Netflix. Therefore, Hulu is part of the Walt Disney Company media empire.
| Aspect | Description | Analysis | Examples |
|---|---|---|---|
| Products and Services | Hulu offers an extensive library of on-demand streaming content, including TV shows, movies, documentaries, and original series. The service also provides live TV streaming with access to various channels. Subscribers can access Hulu’s content on various devices, including smartphones, tablets, smart TVs, and gaming consoles. Hulu also offers add-on features like ad-free streaming and premium channel subscriptions. | Hulu’s product and service portfolio caters to the evolving streaming preferences of consumers. The combination of on-demand content and live TV streaming makes it a versatile platform. Original content and partnerships with major studios enhance its library. Multiple device compatibility ensures accessibility. Additional features like ad-free streaming and premium channels enhance the user experience and generate additional revenue. | On-demand streaming content, live TV streaming, access on multiple devices, original content, partnerships with major studios, ad-free streaming, premium channel subscriptions, versatile platform, catering to evolving streaming preferences. |
| Revenue Streams | Hulu generates revenue primarily through subscription fees from its subscribers. These fees vary based on the subscription tier chosen, such as the ad-supported plan or ad-free plan. The service also earns income from advertising, with ads shown during select programming for ad-supported subscribers. Additionally, Hulu offers add-on services like premium channel subscriptions (e.g., HBO, Showtime) for an additional fee. | The core revenue source for Hulu is subscription fees from its users, with different pricing tiers based on ad support and additional features. Advertising revenue is another significant income source, with ads shown during certain content for ad-supported subscribers. Add-on services like premium channel subscriptions further diversify revenue streams. Hulu’s multiple revenue sources contribute to its financial stability. | Revenue from subscription fees (ad-supported and ad-free plans), advertising revenue, income from add-on services like premium channel subscriptions, diversified revenue streams ensuring financial stability. |
| Customer Segments | Hulu’s customer segments include individual consumers of all ages, households, families, and cord-cutters looking for a streaming service with a variety of content options. The live TV streaming feature also appeals to viewers who want access to live sports, news, and events. Hulu’s original content and partnerships target those interested in exclusive programming. | Customer segments for Hulu encompass a broad range of individual consumers, households, families, and cord-cutters seeking diverse streaming content. The live TV streaming feature caters to viewers looking for live sports, news, and events. Hulu’s original content and partnerships target those interested in exclusive programming. The service serves consumers looking for a versatile streaming platform. | Individual consumers, households, families, cord-cutters, viewers seeking diverse streaming content, live TV streaming enthusiasts, those interested in exclusive programming, versatile streaming platform appealing to various customer segments. |
| Distribution Channels | Hulu’s content is distributed primarily through its own streaming platform, accessible via the Hulu website and dedicated mobile apps. The service is also available on various streaming devices like smart TVs, streaming media players, and gaming consoles. Additionally, Hulu collaborates with ISPs (Internet Service Providers) to offer bundled services to customers. | Hulu’s primary distribution channels are its streaming platform, website, and mobile apps. Compatibility with various streaming devices ensures accessibility. Collaborations with ISPs expand market reach and offer bundled services. Hulu’s distribution strategy focuses on maximizing accessibility for subscribers. | Streaming platform, website, mobile apps, compatibility with streaming devices, collaborations with ISPs for bundled services, distribution channels ensuring accessibility and market reach. |
| Key Partnerships | Hulu forms partnerships with major studios, networks, and content providers to enhance its content library. Collaborations with cable TV providers enable Hulu to offer live TV streaming with a wide range of channels. Licensing agreements with premium channels (e.g., HBO, Showtime) provide additional content options for subscribers. Hulu also collaborates with advertisers for targeted advertising campaigns. | Partnerships with major studios and content providers enrich Hulu’s content library. Collaborations with cable TV providers expand its live TV streaming offerings. Licensing agreements with premium channels broaden content choices. Collaborations with advertisers enable targeted advertising campaigns. These partnerships contribute to content variety, viewer options, and advertising revenue. | Partnerships with major studios, content providers, cable TV providers, licensing agreements with premium channels, collaborations with advertisers, instrumental in content variety, viewer options, and advertising revenue. |
| Key Resources | Key resources for Hulu include its extensive content library, which includes licensed content, original series, and live TV channels. The service’s streaming platform, apps, and website are vital resources for content delivery. Marketing and advertising efforts support subscriber acquisition and retention. A dedicated workforce, including content creators and technical support teams, ensures content quality and user experience. Financial resources provide support for content acquisition and original productions. | Resources for Hulu encompass its extensive content library, streaming platform, apps, website, marketing and advertising efforts, a dedicated workforce including content creators and technical support teams, financial resources for content acquisition and original productions. These resources collectively support Hulu’s position as a leading streaming service. | Extensive content library, streaming platform, apps, website, marketing and advertising efforts, dedicated workforce, financial resources, resources supporting a leading streaming service. |
| Cost Structure | Hulu incurs various costs associated with its operations, including expenses for content licensing and acquisition, content creation (original productions), marketing and advertising expenditures, technical infrastructure maintenance, employee salaries and benefits, customer support, research and development investments, and administrative overhead. Investment in content acquisition and original content production represents a significant cost. Effective cost management is vital to maintain competitive pricing and profitability. | Costs associated with Hulu’s operations include content licensing and acquisition expenses, content creation for original productions, marketing and advertising expenditures, technical infrastructure maintenance, employee salaries and benefits, customer support, research and development investments, and administrative overhead. Investment in content acquisition and original content production is a significant cost. Efficient cost management is essential to remain competitive in the streaming industry. | Content licensing and acquisition expenses, content creation for original productions, marketing and advertising expenditures, technical infrastructure maintenance, employee salaries and benefits, customer support, research and development investments, administrative overhead, investment in content acquisition and original content production, efficient cost management crucial in the competitive streaming industry. |
| Competitive Advantage | Hulu’s competitive advantage lies in its diverse content library, which includes a combination of licensed content, original series, and live TV channels. The service appeals to a wide range of viewers, from those seeking on-demand content to those interested in live TV streaming. Partnerships with major studios and networks enhance its offerings. Collaborations with advertisers enable targeted advertising, supporting revenue. Hulu’s commitment to original content production and its ability to adapt to evolving viewer preferences contribute to its competitive position in the streaming industry. | Hulu’s competitive strength is founded on its diverse content library, catering to various viewer preferences. The inclusion of live TV streaming expands its audience. Partnerships with major studios and networks enhance its content offerings. Collaborations with advertisers enable targeted advertising campaigns, supporting revenue. The commitment to original content production and adaptability to changing viewer preferences further solidify Hulu’s competitive position in the streaming industry. | Diverse content library, combination of licensed content, original series, and live TV channels, appeal to a wide range of viewers, partnerships with major studios and networks, collaborations with advertisers, commitment to original content production, adaptability to changing viewer preferences, competitive position in the streaming industry. |
More about the Hulu business model
Hulu is a subscription-based streaming platform, aggregating original TV, entertainment, and series content formats, and it distributes it across its platform.
Hulu also offers linear broadcasting and cable channels, with 47.2 million subscribers in 2022.
Hulu licenses the content through several agreements with television studios and makes it mostly available on its subscription-based platform.
Hulu is a streaming platform that serves users in the United States with a library of content from networks such as ABC, NBC, FX, and CBS.
The company was founded as a joint venture between News Corporation, NBC Universal, and Providence Equity Partners in 2006.
Hulu launched as a private beta service on October 29, 2007, inviting users to provide their email addresses to a website with no content.
Access to the general public was offered in 2008.
Although the platform was officially launched one year after Netflix, Hulu’s point of differentiation was that it offered free next-day streaming of popular TV network programs while also selling access to a catalog of films and television series.
According to a February 2022 earnings report, Hulu enjoys a subscriber base of over 47 million users in the United States.
Hulu ownership structure
Since its founding, Hulu has undergone several changes in ownership.
The first significant change in ownership occurred when The Walt Disney Company took an equity stake via subsidiary ABC Enterprises Inc. in 2009.
Providence Equity Partners sold its initial 10% stake back to the company for $200 million in 2012.
Time Warner then acquired a 10% stake four years later, with owner AT&T then selling 9.5% back to Hulu in 2019 to concentrate on its competing service HBO Max.
During the intervening years, News Corporation’s stake was transferred to 21st Century Fox as the former company split its publishing and television/film holdings.
In March of 2019, Disney acquired 21st Century Fox, giving the company a 60% majority stake in Hulu.
Two months later, the only other major shareholder Comcast agreed with Disney to sell its 33% stake as early as 2024.
The deal terms stipulate that the price of the acquisition will reflect a minimum total equity value of $27.5 billion, which means Comcast can expect around a third of this amount.
Despite the deal not coming into effect for several years, Disney took full ownership of Hulu effective immediately.
To that end, Comcast became a silent partner, and Hulu became a Walt Disney Direct-to-Consumer & International (DCTI) division.
Disney CEO Bob Iger noted that Disney’s integration of Hulu would enable increased investment toward producing original content and make the platform “even more compelling and a greater value for consumers.”
Origin Story
Hulu is a subscription-based streaming service that offers its users a vast selection of movies, TV shows, and original content.
It was launched in 2008 as a joint venture between several media companies and has since grown into a major player in the streaming market.
Hulu now has around 48 million subscribers in the United States and is currently majority-owned by The Walt Disney Company.
Early years
Hulu was founded in 2007 as a joint venture between News Corporation and NBC Universal.
Those companies were later joined by Providence Equity Partners (who invested $100 million) and The Walt Disney Company.
Some of the key personnel involved in the process included Peter Chemin, JB Perrette, Bruce Campbell, Mike Lang, Beth Comstock, Darren Feher, Jason Kilar, and George Kliavkoff. Kilar was named Hulu CEO later that year.
The idea for Hulu came about as a way for these companies to compete with the rising popularity of YouTube and video piracy on other online video platforms.
But perhaps more importantly, Hulu was conceived to streamline broadcast distribution, bypass gate-keepers such as YouTube and iTunes, and control the advertising ecosystem.
NBC CEO Jeff Zucker was particularly hostile toward iTunes because its business model had turned media revenue:
“from dollars into pennies” and that “Apple sold millions of dollars’ worth of hardware off the back of our content, and made a lot of money. They did not want to share in what they were making off the hardware or allow us to adjust pricing.”
Official launch and Disney stake
Hulu was made available to the public on March 12, 2008, with a somewhat limited selection of content from the founding networks.
Launched about twelve months after Netflix, Hulu differentiated itself with the next-day streaming of network programs.
Hulu did not offer any live TV channels at the time. Instead, it focused on providing on-demand access to popular TV shows such as The Office and The Simpsons. The service was free to view but supported by ads that appeared before and during the content.
Despite the incorporation of ads, however, Hulu only showed them for 2 minutes out of 30 – a substantial improvement on the 6 minutes’ worth of ads shown on traditional TV networks.
In 2009, Disney announced that it had taken an equity stake in Hulu for an undisclosed amount. As part of the deal, some of its television content and feature films would be made available on the Hulu platform.
Over the first year, the number of shows and films on the platform increased from just a few dozen to more than a thousand.
Hulu Plus and content production
The Hulu Plus subscription service was launched in 2010 which enabled consumers to access the full series of some of their favorite titles.
Consumers could also receive undelayed access to new content.
Hulu became one of the first such platforms to produce its own content in 2011 with the release of A Day in the Life. In fact, the documentary series premiered two years before the first Netflix production House of Cards in 2013.
In September of that year, Hulu passed 1 million subscribers.
Hulu goes commercial free
After Hulu started to invest more in original content, it moved away from free broadcast television toward a premium subscription model used by cable TV providers and competitors such as Netflix and Amazon.
The first commercial-free plan was launched in September 2015, and the platform hit 12 million subscribers in 2016. The following year, Live TV was launched. This made Hulu the only streaming service to offer both live channels and an on-demand content library.
Disney assumed full operational control of Hulu when it acquired 21st Century Fox in addition to the $1.43 billion purchase of AT&T’s 10% stake in 2019.
Disney vs. Netflix
By 2022, Hulu represented a key asset within Walt Disney’s galaxy of streaming brands to compete successfully against Netflix.
The aggressive acquisition campaign of The Walt Disney Company, to keep up first, then successfully dominate the streaming industry, resulting in a massively reduced profitability for the company.
Thus, the streaming war has proved to be quite expensive for Disney, which will try to bring its profitability structure back on track in the coming years as its streaming operations become mature enough and Disney figures out a bundling strategy to take over Netflix’s offering.
Key takeaways:
- Hulu is a subscription-based streaming service that offers a vast selection of movies, TV shows, and original content to its users. It was launched in 2008 as a joint venture between several media companies and has since grown into a major player in the streaming market.
- Hulu was made available to the public on March 12, 2008, with a somewhat limited selection of content from the founder networks. Launched about twelve months after Netflix, Hulu differentiated itself with the next-day streaming of network programs.
- After Hulu started to invest more in original content, it moved away from free broadcast television toward a premium subscription model used by cable TV providers and competitors such as Netflix and Amazon.
- Hulu is a streaming platform that servers users in the United States with a library of content from networks such as ABC, NBC, FX, and CBS. The company was founded as a joint venture between News Corporation, NBC Universal, and Providence Equity Partners in 2007.
- Hulu has undergone several changes in ownership over the years, with Providence Equity Partners, Time Warner, Comcast, and AT&T involved with the company at various times.
- Disney became the majority shareholder in 2019 when it acquired 21st Century Fox in 2019. The other majority shareholder, Comcast, has also agreed to be acquired as early as 2024 with the company remaining a silent 33% stakeholder until its interests are sold off.
Key Highlights
- Ownership Structure: Hulu was initially founded as a joint venture between News Corporation, NBC Universal, and Providence Equity Partners in 2007. Over the years, ownership has changed hands, with The Walt Disney Company gradually increasing its stake. As of 2022, Disney holds a 67% majority stake, effectively giving it full control over Hulu.
- Subscription-Based Streaming Platform: Hulu is a subscription-based streaming service that offers a wide selection of movies, TV shows, and original content to its subscribers. It differentiates itself by providing next-day streaming of popular TV network programs.
- Subscriber Growth: Hulu has experienced significant subscriber growth over the years. It had approximately 47.2 million subscribers in 2022, compared to 43.8 million in 2021 and 36.6 million in 2020.
- Licensing Content: Hulu licenses content through agreements with television studios, making it available on its subscription-based platform. The library includes content from networks such as ABC, NBC, FX, and CBS.
- Origin Story: Hulu was officially launched on March 12, 2008, as a joint venture between major media companies. It was founded to compete with rising online video platforms like YouTube and to streamline broadcast distribution.
- Evolution of Hulu: Over the years, Hulu evolved from a free, ad-supported service to a premium subscription model. It launched Hulu Plus, offering access to full series and new content. In 2015, it introduced a commercial-free plan and later added live TV channels.
- Disney’s Control: Disney’s acquisition of 21st Century Fox in 2019 allowed it to take a 60% majority stake in Hulu. Subsequently, Comcast, the other major shareholder, agreed to sell its 33% stake to Disney in 2024. Disney assumed full operational control of Hulu immediately.
- Competition with Netflix: Disney’s aggressive acquisition strategy aimed to compete with Netflix, and by 2022, The Walt Disney Company’s total paid subscriber base exceeded Netflix’s. However, Disney’s offering is fragmented among Disney+, ESPN+, and Hulu, while Netflix has a single offering.
- Profitability and Future Strategy: The streaming war has impacted Disney’s profitability, but the company is focused on maturing its streaming operations and exploring bundling strategies to strengthen its position in the market. Disney reported significant revenues in 2022 but aims to optimize profitability in the coming years.
More about the Disney media empire
Related Tech Ownership Case Studies
Read More:
