February 8, 2018
Hulu, the No. 3 domestic subscription streaming video service with 17 million subscribers, generated $920 million in combined 2017 equity losses for corporate parents Walt Disney Co., Comcast, 21st Century Fox and Time Warner.
The SVOD service, which is 30% owned by Disney, Fox and Comcast, with Time Warner holding a 10% stake, generated equity losses of $531 million during the 2016 fiscal period.
Based on Comcast’s 10K regulatory filing, the media giant recorded an equity loss of $276 million in 2017, up 64.2 % from an equity loss of $168 million loss in 2016, and $106 million loss in 2015.
Comcast said the losses were driven by higher programming and marketing costs.
Indeed, Disney Feb. 6 revealed it expects more than $250 million in equity losses on Hulu in 2018. The revised projection is up from a previously anticipated loss of $100 million. Disney is on the hook for about $450 million in capital contributions to Hulu in 2018, according to a regulatory filing.
Disney, along with other Hulu corporate owners, expect to recoup the losses through content sales delivered by proprietary channels.
Regardless, BTIG Research analyst Rich Greenfield believes Hulu’s fiscal losses could reach $1.7 billion in 2018 – on top of an additional $1.5 billion in combined capital investment.
Greenfield says when Hulu’s relatively low loss to corporate owners was manageable, fiscal bean counters could spin the results. But as the losses deepen, Greenfield – in a blog note – wrote, “We have virtually no disclosure on the positive impact Hulu’s spending is having on its parent companies.”