Disney's streaming bundle that combines Hulu and Disney+ into one service officially launched Wednesday morning, ending a three-month trial period that the company described as a success.
The “duo” plan, Hulu on Disney+, is priced $2 higher than each individual subscription alone. It follows in the footsteps of the three-service Disney Bundle first introduced in 2020, which also includes ESPN+. In contrast to this continuous offering, the two-service offering focuses on simplifying the consumer experience and aggregating the content of two large, established streaming players within a single outlet. The bundled version features Hulu “tiles” on the home screen alongside Marvel, Pixar, and other original Disney+ mainstays.
Subscriber response has been positive during the trial period, Disney Entertainment Direct-to-Consumer President Joe Early said during a press conference on the eve of the launch. About a third of participants eligible to participate in the beta ended up doing so, he said. Overall viewership, in terms of duration, variety and percentage of paid subscribers watching, all beat internal expectations. “Any way we were measuring and monitoring, the behavior went beyond that,” Early said.
Hulu had 49.7 million subscribers through the end of 2023, including 4.6 million getting paid Hulu + Live TV. Disney+ had 111.3 million, not counting Disney+ Hotstar's base of 38.3 million. The company never revealed the number of subscribers to the package. Throughout the past few months, as work has begun on the two-service bundle, Disney has maintained that both services will remain available as standalones, and that sentiment was reinforced during the briefing.
The consolidation is reshaping the entire streaming sector, and Disney has an added incentive to cash in on Hulu after buying Comcast's one-third stake in the former 17-year-old joint venture and assuming full control of it. Unlike Disney+, Hulu has remained a local operation, though its programming has been consolidated into a number of territories outside the US. During Disney's earnings call with Wall Street analysts last November, CEO Bob Iger said the package would enable Disney to use its “abilities to drive sales” and “increase engagement while continuing to reduce streaming losses.”
Aaron LaBerge, president and CTO of Disney Entertainment and ESPN, called the integration “the most significant technical, operational and product development for Disney+ since its launch.” He added that the initiative is part of a “broader technological transformation that we have made,” with milestones on the horizon including the launch of a major broadcast version of ESPN in 2025.
There are critical aspects to combining a service that offers a strong range of children's and family programming with a service it is known for The Handmaid's TaleThe executives admitted.
The decision to create a three-month trial period was made “so that we can prepare parents, in large part, to essentially implement parental controls,” Iger said on the November earnings call. Early said parents will be able to take advantage of “really robust” controls aimed at not blurring the line between them bluish And The bear. However, he acknowledged that a viewer hungry for adult content on Hulu who then watches young adult fare with their families may want to keep a firm grip on the remote. However, he added: “We have been very careful about this, and advertisers know that.”
The package's launch comes during a period of great scrutiny of Disney's streaming operations. The company has promised investors to begin turning a profit from its livestreaming operations by the end of its fiscal year this fall, meeting a goal first set in 2019, during Iger's first stint as CEO and before the Covid disruptions. It has also recently come under attack by activist investors, primarily Nelson Peltz's Trian Fund Management, ahead of its annual shareholder meeting on April 3. Peltz pointed out errors at the broadcast, though most notably the company's succession planning and the movie studio's mistake in inviting shareholders to vote him on the board alongside former Disney CFO Jay Rasulo.
Driving “overall viewership”, rather than trying to maintain current levels in individual services, is the primary strategic goal, Early said. The added hope is that “Hulu-dominant” subscribers who have access to Disney+ will spend more time there. “They don't know there's so much content on Disney+ for them,” Early said. “They were probably coming for the spinoff and then coming back to Hulu.”
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