Industry

According to Parrot Analytics, Disney first earnings of 2023 with CEO Bob Iger back is facing a fundamental strategic crossroads.

Some of the questions facing this century-old institution include: whether to shutter linear channels, whether to license content to competitors to juice revenue, where to debut animated movies, what happens to ESPN, and what to do about Hulu.

Despite all the outside noise, Parrot Analytics continues to view Disney as one of the best-positioned players to monetize the demand of its streaming and linear content, especially if it holds onto Hulu and buys out Comcast’s remaining stake in the platform.

Above all else, Disney remains the market leader in corporate demand share — which serves as a proxy for both long-term streaming success, and short-term licensing revenue potential.

Demand for original series on Disney+ has driven Disney’s global streaming success over the last three years. Since early 2020, the global demand for Disney+ Originals has grown 380%. This has helped lead to a 390% increase in global subscribers over the same time, showing the key link between demand for original series and SVOD subscription growth.

However, as the US and global streaming markets approach a potential saturation point, subscriber retention will be equally critical to the long-term viability of today’s entertainment giants. This is where Hulu comes into play.

Hulu should be a key part of Disney’s strategy because it accounts for the most in-demand TV catalog of any other streaming service with US audiences, even beating out Netflix. Hulu is in second place in total catalog demand (TV & movies), and when combined with Disney+ would beat out both Netflix and a potential combo of HBO Max and Discovery+ for first place. This library content is exactly the kind of material that drives subscriber retention.

Furthermore, Hulu fills in the audience demographic gaps that Disney+ currently lacks: namely, older and more female audiences. The two platforms combined would create the ultimate four-quadrant service.

Regardless of whether Disney shifts Hulu into a tile on the Disney+ app or keeps it as a standalone piece of the Disney Bundle, the data is clear: demand for both exclusive and licensed content on Hulu provides immense short and long-term value to the Disney streaming and entertainment empire.