Disney says charter dispute leads to 60% increase in Hulu + Live TV subscriptions – Deadline
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Exclusive: Disney has seen a 60% jump in Hulu + Live TV subscriptions compared to internal projections since the carriage impasse with Charter began, according to figures provided to Deadline by a Disney spokesperson.
Last Thursday, 18 Disney cable networks and eight ABC stations stopped serving Charter’s Spectrum in one of the most controversial and significant television disputes in memory.
Hulu, which has been under Disney’s operational control since 2019, launched its bundled TV package in 2017. It has grown steadily to become one of the top providers in the US, with 4.3 million subscribers. This ranks slightly behind YouTube TV among packages offered online, but most online players are actually growing at a time when cable and satellite distributors are quickly shedding customers.
Even if it’s not the leading online TV package, Hulu + Live TV makes an interesting strategic choice for Disney at a time when Charter’s $2.2 billion annual affiliate fee is under threat. After acquiring Hulu in 2019, Disney began integrating the streaming service with major platforms such as Disney+, Hulu on Demand, and ESPN+. It also experimented with marketing messages that would be anathema to the traditional domain of cable trucks and set-top boxes, urging customers to turn Hulu + Live TV on and off based on their seasonal viewing interests, especially sports. In 2021, Disney+, Hulu on-demand, and ESPN+ are integrated with Hulu Live at no additional charge, though the initiative also came with a $5 per month price hike for the live package.
The surge in Hulu + Live TV subscriber activity also coincides with news of an accelerated timeline for Comcast to sell a third of its financial stake in Hulu to Disney. Appearing at the Goldman Sachs investor conference, Comcast CEO Brian Roberts said the process will now begin on September 30 instead of January. He painted a rosy picture of Hulu and noted its bundling effectiveness, though he didn’t specifically mention the live TV bundle. “You get all the content and all the collections,” he said, noting that the final valuation would far exceed the $27.5 million minimum the companies agreed to in 2019.
Gains in recent days in Hulu + Live TV have come primarily as a result of Disney’s own promotion, as Hulu’s live service was not among the services recommended to consumers under the charter. There was an uptick in marketing the service through the usual channels, including social media. Given the current surge in viewer demand for live sports — the carriage battle became public during the US Open and with college football and the NFL looming — Charter took the unusual step of referring customers to competing providers. The company even teamed up with one of them, Fubo, to offer a discount for new subscribers.
The logic of sending customers across the street is that Charter hopes to continue providing broadband service to customers who have discontinued their TV service. By encouraging a shift to a package delivered online (as opposed to a satellite provider or Verizon FiOS, which are available on many rental markets), Charter could still benefit from the outcome. Disney’s blog post over the weekend, though it made a prominent mention of Hulu + Live TV, also directs Spectrum customers to a website where a few other Internet TV providers are listed.
Inquiries sent out by Deadline to several other Internet TV packages, including YouTube TV, Fubo and DirecTV, did not elicit any recorded comments about subscriber trends during the outage.
A period of sluggishness around transfer negotiations has begun since a series of initial statements that began last Thursday night and continued through the Labor Day weekend. The charter company announced last Friday that it was ready to “move on” from the video business unless a quick resolution was reached with Disney. The pledge has worried investors and a host of stakeholders in a TV package that is more fragile than ever. Every year, the pace of cord cutting picks up, and the withdrawal of the No. 2 cable company (with 14.7m customers) would deal another big blow.
Programmers (including Disney) have been increasingly prioritizing broadcasting of late, which has created friction with some distribution partners. Disney has refuted Charter’s claims that it wants to charge customers twice for content available on Disney+ and Hulu as well as general entertainment cable networks.