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Can Disney (DIS) and Hulu Reduce Netflix’s Dominance in 2019?

Disney with its upcoming streaming service Disney+ and its acquisition of the majority stake in Hulu, following Twenty-First Century Fox’s buyout, is looking to challenge Netflix’s dominance in the streaming space.

Hulu added more domestic subscribers than Netflix in 2018. While Netflix added about 3.7 million subscribers in the first three quarters of 2018, per CNBC, Hulu recently announced that it added 8 million U.S. subscribers in 2018, bringing the total count to 25 million. Hulu attributed the subscriber gain to its content strength.

Notably, Hulu is jointly owned by Disney (30%), Fox (30%), Comcast (30%) and AT & T (10%).

Additionally, Hulu received 27 Emmy Award nominations in 2018. The company’s original series The Handmaid’s Tale received a total of 20 nominations.

Hulu’s exclusive content offerings like ERLostBob’s Burgers, and 30 Rock are also helping it attract and engage subscribers. Per research firm 7Park Data, 89% of Hulu subscribers first watched licensed programming before watching original content. Moreover, Hulu noted that the average time spent on the platform increased 20% in 2018.

Hulu May Expand to International Markets

In its fourth-quarter fiscal 2018 earnings, Disney’s CEO Bob Iger stated that the company will continue to invest in Hulu’s programming after the acquisition of the majority stake.

Additionally, Iger stated that the company plans to expand Hulu’s presence internationally and add more licensed content from international markets to its portfolio.

Moreover, he mentioned that Hulu will continue to host more “adult-oriented series, classic television shows, and exclusive Fox offerings” and may not include Disney’s content. However, Hulu continues to incur losses due to higher investments in programming.

The Walt Disney Company Revenue (TTM)

Disney+ Gets Boost With Content Strength & Spend

Disney also plans to launch its own direct-to-consumer streaming service, Disney+, in 2019, which will feature original Disney, Pixar, Marvel, Star Wars and National Geographic content.

Additionally, some of the confirmed original content in the lineup includes two original live-action Star Wars TV shows — a prequel to the Star Wars film Rogue One, a rebooted version of the High School Musical franchise, a live-action film Lady and the Tramp, an adventure movie Togo, and Monsters, Inc. series from Pixar.

Moreover, all Disney’s movies from 2019 onward will be available on the streaming service including Captain Marvel, AladdinToy Story 4The Lion KingStar Wars: Episode IX, and more.

Further, the company’s spend in 2019 is expected to be huge. The combined spend from Disney and Comcast in 2018 was expected to be $43 billion, per Ampere report.

However, Disney faces stiff competition from Netflix.

Netflix Rides on Portfolio Strength

Netflix’s content strength is driving its subscriber base (137 million at the end of third-quarter 2018). Additionally, at the recent Golden Globes, the company won three TV series awards and five film awards. Notably, Netflix received a total of 13 nominations, eight in TV and five in films. Moreover, the company was named Entertainer of the Year by Associated Press (AP) in 2018.

Netflix’s 2019 lineup looks impressive. It includes a thriller (What/If), a sitcom (Mr. Iglesias), sci-fi/horror (Daybreak), dramedy (Russian Doll), animated series (Go! Go! Cory Carson), adult anime series (Rilakkuma and Kaoru), nature documentary (Our Planet), crime drama (Nowhere Man), a music competition (Rhythm + Flow) and others.

Conclusion

Although, the streaming space is currently dominated by Netflix, Disney’s popular franchises and its vast library, which are already popular, may give it an edge. Additionally, the company’s diverse portfolio is expected to win subscribers from its peers.

Moreover, Disney’s ability to invest heavily in its content and its stake in streaming service like Hulu may help it easily compete against other streaming services and create a niche for itself.