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Investor Thinks Disney Should Buy Hulu Now, or Get Out of Streaming, But is He Right?

David Satin

Activist investors love attempting to publicly shame Disney into doing what they want it to do. In 2022, investor Dan Loeb was not shy in airing his thoughts about how Disney should handle ESPN. Now another investor is chiming in, this time regarding the strategy that he thinks the company should be pursuing in regard to Hulu.

Nelson Peltz is the investor in question, and in his opinion, Disney has been dragging its feet with Hulu long enough. In a recent explosive interview on CNBC, Peltz stated that he thought Disney needed to either purchase the remaining 33% stake in Hulu that it doesn’t currently own, or abandon Disney+ and get out of streaming altogether. Comcast, which pulled the next-day streaming rights to its networks' shows from Hulu in 2022, owns the final third of the service.

The reasoning behind Peltz’s argument is that Disney overpaid when it purchased most of FOX’s assets in 2019, which included the 33% of Hulu that gave the company controlling interest, and is now stuck in a middle ground of high debt. That debt is being augmented by the company’s streaming losses, which climbed so high in 2022 that they contributed to the exit of former Disney CEO Bob Chapek.

Disney did not take Peltz’s comments lightly, and pushed back hard against them. In an SEC filing this week, the company stated flatly that Peltz didn’t really understand the nature of their business, and has “no track record” of helping large media/technology companies in a meaningful way. Peltz is seeking a position on Disney’s board, which is not exceedingly likely if current board members have anything to say about it.

Disney acquired FOX’s stake in Hulu during the 2019 acquisition, leaving only one-third of the streamer owned by Comcast. The company’s CEO Brian Roberts has repeatedly made it clear that he thinks his company’s stake in Hulu would fetch much more than the $27.5 billion that Disney has offered if the stake were put up for auction.

Related: Next-Gen Storytelling Should Stay, Hulu-Disney+ Merger Should Go Under Iger’s Second Tenure

According to Puck News, Comcast is seeking a payday in the range of $50 billion from Disney. That’s a fairly sizeable gap between the two companies, but it’s hardly an insurmountable issue.

With apologies to Peltz, his analysis of the situation at Disney may be off-base. There’s very little reason for Disney to shell out all the extra cash that Comcast wants at this point when it has more than 20 months to get its finances in order first.

Even if Disney decided to walk away from Hulu, there’s very little sense in the company leaving the streaming business altogether. Disney+ has the largest subscriber base of any streaming service in the world besides Netflix, and the company recently launched an ad-supported price tier to help further monetize its customer base.

It would be untrue to say that everything is operating perfectly for Disney, or indeed for any company in the streaming business right now. But Disney+ has become a highly successful product in the three years of its existence, and it offers brand recognition and content loyalty that few other streaming services can match. Just as streaming has changed dramatically in the past five years, it will undoubtedly do so even more in the next five years, and few companies are positioned better to succeed in this next era of streaming than Disney.

Investors are primarily concerned with how to make themselves and their fellow investors more money, so Peltz can perhaps be forgiven for offering Disney advice that would benefit him financially in the short term. But Disney should keep its head down and continue working on the streaming side of its business, including its potential purchase of the final 33% of Hulu.

  • 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.”

    It offers a good selection of current TV shows and its ad-supported tier is cheaper than both Netflix and Amazon Prime Video. You will be able to watch most shows from networks like ABC and Fox, and cable channels like FXX, FXM, HGTV, and more.

    The service has a Limited Commercials plan for $7.99 a month, or you can upgrade to their No Ads plan for $14.99 a month. For $69.99 a month, you can get Hulu Live TV from major cable channels, live locals and regional sports networks.

  • Disney+

    Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages. It is notable for its popular original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”

    Disney+ has two plans – one with ads and one without ads. Disney+ Basic with Ads costs $7.99 / month. If you don’t want ads, you can choose Disney+ Premium with No Ads which costs $10.99 / month.

    The Premium plan also offers an annual option for $109.99 / year ($9.17/mo.).

    If you want all of Disney streaming services, they have two options for The Disney Bundle. The Disney Bundle Basic includes Disney+, Hulu, and ESPN+ (with Ads) for $7.99 / month. The Disney Bundle Premium (without Ads) for $19.99 / month.

    The app supports unlimited downloads (on their Premium Plans), four simultaneous streamers, up to 7 profiles, 4K streaming, and includes hundreds of avatars.

    The service includes 25+ original series, 10+ original movies, 7,500 past episodes, 100 recent movies, and 400 library titles including the entire Disney Vault.

    You can see the full list of available Disney, Disney Channel, Star Wars, Pixar, Marvel, Nat Geo shows and movies, or all available Disney+ content by checking out our Disney+ Streaming Movie List.

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