The Streaming Game Changes Yet Again as Disney Takes Control of Hulu

Two stories now about streaming services, at first glance unrelated, but when you take another look: intimately related.

First, a relatively quiet story about NBCUniversal’s odd choice to push a free, ad-supported streaming service, coming in 2020.

Yesterday, Variety reported from NBC’s annual “upfront” presentation, where it previewed its lineup for the coming year. According to Variety, NBCUniversal ad sales chief Linda Yaccarino focused on advertising, and unveiled plans for their new streaming platform, expected to arrive next year. She said: “While other companies are pushing advertisers out, we’re bringing them in. It will have a slate of originals and a gigantic library of all favorites. The shows that people love the most and stream the most are coming home at a price that every person can afford: free.”

NBCUniversal is wading in at the deep end, in a market already saturated by big players, and set to become even more saturated by the end of the year with the arrival of Disney+ and Apple TV+. By pushing an exclusively-free, ad-supported platform, they will have the benefit of “point-of-difference” but it remains to be seen whether that will be enough to entice viewers, and - crucially - advertisers.

“But hang on!” I hear you say. “That wasn't the big news of the day!” And you would not be wrong. The big, headline-grabbing news yesterday was the deal between Disney and Comcast that saw Disney take control of Hulu, effective immediately.

I’m not gonna lie: this is a complicated deal. I first read about it on Polygon: in a nutshell, Disney already owns a 66% stake in Hulu, with Comcast’s NBCUniversal owning the other 33%. Effective today, Comcast has turned over control of Hulu to Disney, in exchange for a buyout option in 5 years’ time, worth at least $5.8 billion. The deal made headlines because it gives Disney a huge leg up in the streaming world, since it now has control of three major streaming services: the upcoming Disney+, ESPN+, and Hulu.

The thing to note here is that while headlines emphasize Comcast’s role, it’s really NBCUniversal who are potential winners. Vox does a great job of breaking this down:

  • All of NBCUniversal’s shows that are currently on Hulu will stay on Hulu, for now.

  • In a year, NBCUniversal can also put its shows like Saturday Night Live and This Is Us on its own streaming video service.

  • In three years, NBCUniversal can pull its shows from Hulu completely and put them on its own service.

So what we are seeing with all these machinations is that another traditionally-terrestrial network, NBC, is committing to streaming, and doing it in a way, like CBS is, that lets them run a dedicated service for their audience, while diversifying their income streams through licensing and other revenue-generating deals.

So. What does all this mean for Star Trek fans? Probably not much. Except that if you were waiting for market pressure to force CBS to bring Star Trek shows back onto terrestrial might be waiting longer than the USS Discovery did in “Calypso”.

Alison Pitt