February 5, 2020
Disney is moving ahead with plans to launch the Disney+ streaming service in Europe and India (co-branded with Disney-owned Hotstar) next month. Hulu will have to wait its turn. That’s the portfolio of riches CEO Bob Iger has to deal with.
Despite Hulu having more than 30 million subscribers and being a household name in the United States, Disney is putting marketing muscle behind Disney+ with hopes of generating upwards of 90 million subscribers by 2024. The SVOD service ended Feb.3 with 28.6 million subs.
London-based Goldmedia contends up to 7.6 million consumers in the U.K. have indicated a desire to use Disney+ when it launches there on March 24th.
“We are working up a plan to take Hulu internationally. We actually have a lot of specifics around it. But we’ve decided that the priority needs to be Disney+,” Iger said on the company’s Feb. 4 fiscal call.
Indeed, following the Disney+ launch in India on March 29, the service will expand globally, including Latin America, through 2021.
“We feel that we need to concentrate on those launches, in the marketing and the creation of product for those and then come in with Hulu right after or soon after that,” Iger said.
With rival Netflix’s first-mover status touting 167 million global subscribers worldwide, Disney is spending lavishly to bridge the SVOD divide.
CFO Christine McCarthy said the company’s Direct-to-Consumer & International segment (which includes Disney+, Hulu and home entertainment) is expected to generate about $900 million in operating losses for the current second quarter (ending March 31).
“We expect the continued investment in our DTC services, specifically Disney+, and the consolidation of Hulu to drive an adverse impact on the year-over-year change in operating income of our DTC businesses of approximately $520 million,” McCarthy said.
Regardless, the change in focus contributed to Hulu CEO Randy Freer’s previously-announced departure as Disney revamps the service’s management.