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How Is Disney Planning to Boost Hulu’s Content Offerings?

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Jan. 11 2019, Updated 7:31 a.m. ET

Disney’s control over Hulu

The Walt Disney Company (DIS) is set to acquire 21st Century Fox’s (FOXA) film and TV studios, Fox Networks Group, its cable networks such as FX Networks and Fox Sports Regional Networks, and its stakes in National Geographic Partners, its Indian satellite TV businesses such as Star network, and its UK-based satellite TV group Sky, among other key assets.

Disney will also gain a bigger stake in Hulu’s streaming services as part of its Fox acquisition deal. Disney, Comcast’s (CMCSA) NBCUniversal, and Fox have 30% stakes each in Hulu. Time Warner, which is now WarnerMedia after AT&T’s (T) acquisition, holds the remaining 10% stake in Hulu.

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Expansion in Hulu’s content offerings

Hulu has invested in original content to grow its subscriber base. Hulu only operates in the United States (SPY), and it added 8 million subscribers in the country in 2018, bringing its total to ~25 million.

More than original series, Hulu has been focusing on exclusive content offerings. Its subscribers prefer to watch licensed series, such as ER, Lost, and Bob’s Burgers, over original series, such as The Handmaid’s Tale. Disney is also planning to expand Hulu’s content offerings once the Fox deal is completed. Disney’s control over Hulu will help the latter to expand internationally. Hulu will also complement Disney’s DTC (direct-to-consumer) streaming line-up. Disney already has a DTC streaming service called ESPN+, which it launched in April 2018, and it’s set to release a Disney-branded streaming bundle toward the end of 2019.

After Disney’s acquisition of Fox’s assets, consumers will have the option of adopting all three streaming services, just sports, or just Disney-branded movies and shows for the family.

Global OTT content market

The growing popularity of OTT (over-the-top) offerings has attracted a lot of consumers to streaming services. As we can see in the chart above, the global OTT content market has been developing rapidly and is expected to touch $245.8 billion by the end of 2028, according to a report by Future Market Insights.

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