August 8, 2018
Hulu, the SVOD service co-owned by The Walt Disney Co., Comcast, 21st Century Fox and WarnerMedia, may have 20 million subscribers, an Emmy-winning series (“The Handmaid’s Tale”) and an online TV component. It also has burgeoning costs for its corporate owners.
Fox on Aug. 8 disclosed it generated a $127 million fourth-quarter (ended June 30) equity loss for its 30% stake in Hulu. That was up 135% from an equity loss of $54 million during the previous-year period.
For its fiscal year, Fox posted a Hulu equity loss of $445 million – more than double the $215 million equity loss last year.
With Disney assuming Fox’s Hulu stake (for 60% controlling stake) as part of its $71 billion acquisition of 20thCentury Fox Film and other Fox assets, expect the Mickey Mouse company’s equity loss to increase.
Disney CFO Christine McCarthy alluded as much on the company’s Aug. 7 fiscal call.
“The higher losses at Hulu were primarily driven by higher programming and labor costs, partially offset by higher subscription and advertising revenue,” McCarthy said
Indeed, Disney attributed a $49 million second-quarter equity loss to Hulu, which mushroomed to a $193 million through the first six months of the year.
Hulu lost $920 million in 2017 compared to a loss of $531 million in 2016. The fiscal loss is reportedly projected to reach $1.7 billion this year as the service ups original content spending on “The Handmaid’s Tale,” “Marvel’s Runaways,” “Future Man,” and “The Doozers,” among others.