Analysis: Hulu Had Just Four Top-10 Streaming Hits in 2022; Is Service as Valuable as Investors Think?
Hulu is one of the old-timers in the streaming industry. The service first launched way back in 2007, and ever since has been known for offering streaming content from a variety of different — sometimes rival — TV networks, as well as originals.
Hulu finds itself in something of a precarious position these days. The majority of the streamer is owned by Disney, while Comcast still maintains its original 33% share in the company. Due to a contractual agreement, Comcast has to sell its stake if Disney decides to purchase it before the end of 2024, but increasing streaming losses at the House of Mouse have caused some analysts to wonder if the company wouldn’t be better off selling its portion of Hulu instead.
Those same analysts (Lightshed’s Richard Greenfield, Brandon Ross, and Mark Kelley) have followed up on that analysis, and their data suggests that Disney might not see the windfall it would ideally like if it did decide to sell Hulu.
The argument from the analysts is that while Hulu creates plenty of acclaimed originals, as well as carries next-day streams of popular shows like “Abbott Elementary,” people don’t spend as much time watching its shows as other streamers, particularly Netflix. Netflix had 214 shows reach Nielsen’s top-10 most-streamed programs lists in 2022, while Hulu had only four.
Hulu does have its share of popular originals, the analysts admit, but no true breakout hits in the vein of Netflix’s “Stranger Things,” Prime Video’s “The Boys,” or HBO Max’s “The Last of Us.” Series like “The Bear” have won critical acclaim, but that acclaim hasn’t translated to floods of new users or huge spikes in streaming time for the service.
Americans spent a collective 19 million years streaming content in 2022, so it’s surely disappointing for Hulu executives that only four of their original shows on their service spent time on a Nielsen top-10 list. But does that really mean that Disney would have to settle for less if it decided to turn around and sell its stake in Hulu instead of buying Comcast’s share?
It’s hard to say for sure, but likely not. Hulu is one of the most established brands in the streaming industry, and the contract between Disney and Comcast puts the valuation of the 33% portion that Comcast owns at at least $27.5 billion. The platform might not play host to a breakout hit as of now, but that could change at any moment, especially with new seasons of shows like “The Bear” and “Only Murders in the Building” coming to Hulu in 2023. Also, the original value proposition for Hulu was always as a home to stream broadcast and cable shows after they air on their respective linear outlets; the addition of highly lauded originals is only additive to what it does best.
Greenfield, Ross, and Kelley might be right in one aspect of their logic, however; Hulu may well have more value to Disney than to any other media company. Current Disney CEO Bob Iger has always seen Hulu as a better destination for adult content than Disney+, and the platform is an important part of his corporate vision for streaming at Disney.
Still, money talks, and Iger could likely be persuaded to let go of Hulu if the price was right. That’s the key factor, however, as Disney is highly unlikely to accept a bargain price for the service. Lightshed’s analysts may have cause to question Hulu’s value on the open market, but it’s very probable that Disney executives don’t agree.
Hulu
Hulu is a video streaming service that gives access to thousands of full seasons of exclusive series, hit movies, kids shows, and Hulu Originals like “Only Murders in the Building,” and “The Handmaid’s Tale.”