How the Disney-Fox Deal Could Transform Hulu’s Ownership



Disney’s stake in Hulu to double

Walt Disney’s (DIS) deal with Twenty-First Century Fox (FOX)(FOXA) also involves taking Fox’s stake in Hulu, one of Netflix’s (NFLX) challengers in the video streaming market. Four different companies own Hulu. Currently, Fox owns 30% of the business, the same stake as Disney and Comcast (CMCSA). The fourth owner of the online video service is Time Warner (TWX), which controls a 10% stake.

The Disney-Fox deal calls for Fox to transfer its entire 30% stake in Hulu to Disney. As a result, Disney’s stake in Hulu is expected to double to 60%.

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Media deals likely to continue transforming ownership of Hulu

Time Warner, the minority owner of Hulu, is in the process of selling itself to US (SPY) phone carrier AT&T (T), which has been acquiring media assets to try to broaden its revenue sources and, at the same time, stimulate more growth amid slow growth in its core wireless sector.

If Time Warner and AT&T succeed in combining despite facing significant hurdles, AT&T is expected to also become a part owner of Hulu. AT&T currently has a rival service called DirecTV Now. Disney is also planning to launch online video services to rival Hulu and Netflix next year.

A $108.6 billion revenue opportunity in the SVOD market

How media deals—such as Disney acquiring Fox assets and AT&T acquiring Time Warner—would transform Hulu’s ownership remains to be seen. However, the SVOD (subscription video on demand) market continues to expand. Future Market Insights forecasts that the global SVOD market will grow to $108.6 billion by 2026, up from $45 billion in 2014.


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