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How Hulu Could Be an Integral Part of Disney’s Streaming Business

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Hulu’s losses expanded in 2017

While streaming provider Hulu gained a lot of subscribers in 2017, it also lost almost $1 billion. However, Walt Disney (DIS) chief strategy officer Kevin Mayer is not too concerned about the streaming company’s losses, according to his interview with Recode. Mayer thinks it will eventually be a big and profitable service.

Hulu is owned by The Walt Disney Company, 21st Century Fox (FOXA), and Comcast (CMCSA), which have a 30% stake each, while Time Warner (TWX), the fourth owner, has a 10% stake. That equation could change if Disney is successful in acquiring Fox.

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How Hulu could be integral to Disney’s streaming service

However, Hulu may not have access to NBC shows if Disney takes over Fox. Comcast, NBCUniversal’s parent company, may be reluctant to continue licensing NBC’s shows to Hulu, as Disney would have a majority stake in the latter if it acquires Fox. If the acquisition does go through, Hulu could become an integral part of Disney’s direct-to-consumer strategy.

Last year, Disney announced that it would be ending its partnership with streaming giant Netflix (NFLX) in favor of its own streaming service. Disney is slated to release sequels of popular movies in 2019, including Toy Story 4 and the sequel of Frozen.

These movies would be available on Disney’s new streaming platform instead of through Netflix. However, Netflix continues to invest majorly in original content. The streaming giant has a budget of $8 billion earmarked for original content in 2018.

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