Drama at Disney Over Hulu

Netflix is not the only service introducing an ad-supported video-on-demand (AVOD) subscriber package by the end of 2022. Disney+ said earlier in March that it will introduce the AVOD option in late 2022 to North American markets only, with plans to expand internationally by 2023. Some experts have speculated that AVOD on Disney+ is a precursor to combining its platform with Hulu, which already supports an AVOD option and is bundled with ESPN+. Hulu may need the support: this March, NBCUniversal terminated its content-sharing deal with Hulu, to redirect audiences for popular shows to Peacock, its streaming platform, including Saturday Night Live and The Voice. The decision to terminate cost Disney about $1 billion dollars in operating profits for its second fiscal quarter in the year.

Shortly after the announcement that the content-sharing deal would be ending, Hulu announced it would add unlimited DVR to its Live TV option, which started in April. This option is designed to compete with YouTube TV, and add value to Hulu generally for its Live TV subscribers. To compare, Hulu with Live TV features >80 channels, while YouTube TV has >100 in its base plan. Hulu is slightly more pricey than YouTube TV at about $70/month, but comes bundled with Disney+ and ESPN+, in addition to the unlimited DVR. While Disney+ claims it now offers an add on for $2.99 to Hulu, if you subscribe to Disney+, you only benefit from the add-on if you are not a subscriber (loopholes, anyone?). In March, Comcast, which owns NBCUniversal, was in arbitration with Disney over Hulu, in which it owns a 33% stake.

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