Iger: Disney needs Comcast ‘cooperation’ to realise Hulu ambition

Disney is “bullish” about the potential of Hulu, including international expansion, but will have to strike an agreement with Comcast to achieve its goals, according to CEO Bob Iger.

Speaking after Disney posted better than expected second fiscal quarter results, Iger also said that Disney’s movie activities and new streaming service Disney+ will be intricately linked, with Marvel content becoming “somewhat platform agnostic”, with series spin-offs from moves a major part of the streaming offering.

On Hulu, Iger said that Disney was “bullish” about the platform for a number of reasons, notably because it is, in his view, “is the best consumer television proposition out there” with a mix of live channels, news and sports, full seasons of network programming and originals.

However, he said, Comcast’s one third stake in Hulu means that “any big decisions that are made as it relates to investment or expansion would have to be done with their cooperation”.

He said: “Both [companies] probably share a bullish outlook on Hulu, but we can’t do it on our own.”

Iger confirmed that “there has been dialogue with Comcast about them possibly divesting their stake” and said that “if that were to occur” there would “probably be an ongoing relationship” regarding Comcast programming.

On Marvel and Disney+, he said: “We’ll make big films for the obvious reason, but those films will also live on the Disney+ platform in the stories we tell and the series that we create. No one’s really doing that right now.”

He said that this approach could also apply equally to Fox content.

“Clearly, we have library titles that were never going to be made as sequels or as remakes for theatrical distribution that we’re going to look at for a possible production inclusion in Disney+, but there’s also a richness of development and storytelling for theatrical release using the Fox brand,” he said.

Iger revealed that Avengers: Endgamewill be available on Disney+ on December 11, one month after the service launches and reiterated that Marvel would contribute series linked to characters including Loki, Falcon and Winter Soldier that are “intricately linked and tied to the storytelling in the films”.

Within Disney’s new D2C and international unit, growth from international channels due to higher carriage fees and lower sports programming costs, was more than offset by the direct-to-consumer businesses, where Disney is heavily investing in ESPN+ and Disney+, and losses from the consolidation of Hulu.

CFO Christine McCarthy said that Disney expects investment in the direct-to-consumer business, including a fully consolidated Hulu as well as ESPN+ and Disney+ to have a negative impact on year-on-year change in operating income to the tune of US$460 million.

Disney posted quarterly revenues of US$14.922 billion, up 3% and operating income of US$3.816 billion, down 10%.

Revenue from Disney’s D2C and international division was up 15% to US$955 million, but operating losses from the unit widened from US$188 million to US$393 million. Revenue from studio entertainment was also down significantly.