Disney+ 2019 – 2024
We come to bury Disney+ not to praise it, which you all knew was never going to happen anyway. Bob Iger has decided to face reality in the most face-saving way possible. By rolling Disney+ into Hulu.
Okay, here’s some quick background. A few years ago, a DVD-by-mail service called Netflix decided to start streaming content. This infuriated the studios because the DVD Bubble economy finally popped at about the same time. They equated one as being the cause of the other and it really wasn’t.
The DVD Bubble was the result of Blockbuster Video’s predatory late fee practices making DVD purchases preferable to renting. $15 a copy was preferable to the possibility of a $30 late fee. Or you could just pay $8 per month for Netflix (by mail).
But then several alternatives to purchasing DVDs arrived at about the same time; cable-provided DVRs, Amazon rental/purchase, an inventory-rich used market, and good old-fashioned video piracy courtesy of DVDfab. Like I said, these all arrived at about the same time which crashed an artificially inflated market.
But the studios blamed Netflix streaming anyway.
Consequently, they got together and created Hulu. It was initially a free streaming service with commercials thrown in. It didn’t stay free but everyone was expecting that. It worked for a while. Hulu was initially a money loser but that turned around and it was making a profit about the time that Netflix started reporting annual revenues of $20 billion.
It was truly adorable that the entire Hollywood studio system took Netflix at their word for this. The Hollywood Hivemind came to the conclusion that streaming was the future and that they could all make $20 billion a year.
So, forget about a shared service like Hulu.
Warner was the first to bail out with dollar signs glowing in their eyes like Daffy Duck. They sold back their stake in Hulu so they could launch their own disastrous HBOmax. That left Comcast/Universal, Fox Media, and Mickey the Great and Terrible as equal partners.
Disney had a problem with this brave new world. Disney’s had a very light catalog compared to the rest of the studios. For most of its early history, Disney just worked on one project at a time. Walt was more of a super-producer than a studio Mogul. Bob Iger’s answer to this lack of a catalog was the same as his answer to any problem: BUY SOMETHING NOW!!!
Iger wanted to buy up Warner but AT&T had their own comically disastrous ambitions in that regard. Universal was already owned by Comcast, so that was out. Sumner Redstone hopelessly dicked up Paramount’s IP rights when he split the company so that clearly wasn’t worth the money. There was MGM’s back catalog. However, buying up Fox would solve a lot conflicting IP problems with both Star Wars and Marvel. A decent price looked to be in sight and then Universal started a bidding war. When the price tag got up to $75 billion it clearly and obviously wasn’t remotely worth the cost.
BUY SOMETHING NOW!!!
Disney paid it.
There was however a very big problem, it gave Disney an automatic controlling interest in HULU and Comcast wasn’t remotely cool about being demoted from equal to junior partner. No problem if you are Bob Iger.
BUY SOMETHING NOW!!!
However, having just shelled out $75 (holy shit) billion for Fox, Disney couldn’t afford to buy Hulu outright at the time. But a deal was reached, Disney would have to pay $27.5 billion for Universal’s remaining stake in Hulu in 2024, (plus some quit-claims on Universal’s Marvel IPs).
I could review the unbelievable disaster that has been Disney Plus… So, I will. Disney+ is the greatest disaster to befall Disney since the death of Walt himself. The obvious drawbacks of having one of the most purchased catalogs of all time never seems to have crossed anyone’s mind. The people who own these movies were supposed to be Disney+’s target audience. The target audience being people who have no reason to pay a monthly fee for movies they already own. That was only the first of its major problems, the second was that it trained the Disney audience to not bother seeing movies in theaters since they were going to be on Disney+ in short order. And since this movie was going to straight to Disney+, there was also no reason to buy it in hard media or buy a streaming license from Amazon or Apple TV, which killed those streams of revenue. Worse still, Netflix was no longer writing billions in checks to Disney because Disney was writing checks to itself.
Then there was the brand rape. Marvel and Star Wars both had to provide content to Disney+. Lots and lots of content. Crappy, garbage tier straight to streaming content. If it had been good that might have been one thing but it wasn’t. And even among the remaining few Marvel and LucasFilm Advocates, there was a feeling of brand oversaturation.
Finally, the content was horrendously overpriced to produce. Disney+ was famously losing the equivalent of one cruise ship per quarter on Disney+.
And now it’s over. Disney has decided to move forward with the purchase of Universal’s outstanding stake in Hulu. Disney+ is going to be “rolled into it.” Which is another way of saying Disney+ is going to be dissolved.
My assumption is that the writer’s strike gave Iger the nudge he needed to drop the hammer on his baby.
Hulu is successful but the ROI for Disney won’t be there for a long time.
Okay, I’m done here.
