They’d been courting for a while, but the Disney+ and Hulu marriage is about to become official.
Disney on Wednesday said it’s pressing ahead to fully integrate Hulu into Disney+ for all subscribers.
Disney also said it plans to launch a unified streaming app for Disney+ and Hulu next year. In international markets, Hulu will replace the Star tile on the Disney+ app.
The news, announced during its quarterly earnings, came after Disney finalized a plan last month to take full ownership of Hulu, buying out Comcast’s one-third stake. Disney first became a Hulu shareholder in 2009.
The plans give further credence to speculation among Disney streaming insiders that Disney might eventually phase out the Hulu app. Business Insider’s James Faris reported this week that it had become impossible to ignore the Mouse House’s increasing emphasis on Disney+ over Hulu.
Research house MoffettNathanson’s Robert Fishman wrote in a mid-July note that further integrating Hulu into Disney+ could save the company about $3 billion through “the elimination of duplicative technology and administrative costs.”
In a statement on Wednesday from Disney CEO Bob Iger and its chief financial officer, Hugh Johnston, the executives said the merging of Hulu into Disney+ would give subscribers more choice and personalization.
“This will enhance our ability to continue to grow profitability and margins in our entertainment streaming business through expected higher engagement, lower churn, and advertising revenue potential, as well as operational efficiencies that over time may result in savings that we can reinvest back into the business,” the statement said.
Paolo Pescatore, a media analyst at PP Foresight, said the all-in-one app approach was logical and would remove user frustration.
“Overall, it represents better value and allows Disney to understand customers’ habits and drive additional value,” Pescatore said.
Disney also said Wednesday it would stop reporting quarterly subscriber numbers and average revenue per user stats for its streaming services, which also include ESPN+. Rival Netflix stopped reporting its quarterly subscriber numbers earlier this year. Disney said it would continue to provide information on the profitability of its entertainment direct-to-consumer segment.
Disney is doubling down on streaming, which it is hoping will become a key pillar of growth for its business, helping to offset declines in traditional TV advertising and affiliate revenue.
The company is preparing to launch its stand-alone ESPN streaming service on August 21. Late on Tuesday, Disney announced a deal with the NFL that will see ESPN acquire Disney acquire the NFL Network and other media assets. NFL is taking a 10% stake in ESPN as part of the deal.
Separately, on Wednesday, Disney said it had landed a five-year deal to air WWE’s biggest events, including WrestleMania and the Royal Rumble, on ESPN in the US from 2026. Netflix holds these rights internationally.
Disney on Wednesday raised its full-year profit guidance for its entertainment direct-to-consumer business to $1.3 billion, an increase from its previous estimate of $1 billion. For the quarter ended June, revenue in the segment grew by 6% and it added 2.6 million Disney and Hulu subscriptions, bringing the total to 183 million.
Disney’s stock was down 2% in premarket trading on Wednesday. It’s up 6% so far this year.
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