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    Disney takes over Hulu

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    This June 27, 2015, file photo, shows the Hulu logo on a window at the Milk Studios space in New York. (AP Photo/Dan Goodman, File)

    By Tali Arbel, Technology Writer

    NEW YORK (AP) --

    Disney cut a deal with Comcast to take full control of Hulu as each prepares to launch its own streaming service.

    The companies said Tuesday that Comcast, which owns a third of Hulu, may sell its stake starting in 2024 for a minimum of $5.8 billion. Either company can require the other to make the deal.

    Hulu launched more than a decade ago as the major entertainment companies dealt with the rise of digital media. Its owners have contracted as a wave of mergers consolidated the industry: The Walt Disney Co. absorbed 21st Century Fox's stake as it bought up Fox's studio and many of its networks, while AT&T sold off the share it inherited with the purchase of Time Warner, now renamed WarnerMedia.

    AT&T's sale valued the unprofitable Hulu at $15 billion. The agreement with Disney and Comcast values Hulu at a minimum of $27.5 billion in 2024. Disney has forecast that Hulu will turn a profit around then.

    Hulu today still shows network TV episodes and original series for $6 a month. It has a newer live-TV service that costs $45 a month.

    Having total control of Hulu gives Disney more power to support its own streaming efforts. The company is launching a new kids-focused streaming service called Disney Plus this year, and is likely to bundle that with Hulu and its sports service, ESPN Plus.

    Comcast's NBCUniversal, meanwhile, will debut a streaming service in 2020. And WarnerMedia is launching its own streaming service which will focus on HBO and other shows and movies owned by the company. There's also a new one from Apple, with original content.

    An aftereffect of all these new services may well be the fragmentation of content across services. Most of the most popular shows on Netflix are owned by the big entertainment companies — "Friends," ''The Office" — which may well want them for their own services.

    At least for Hulu, NBCUniversal has agreed to keep its shows and networks on there until late 2024.

    However, NBCUniversal is preparing to stock its own service as the streaming wars heat up. In a year, it can start putting its video on its own streaming service that is currently exclusive on Hulu. (It'll cut Hulu's costs in return.) And NBCUniversal could choose to pull its content from Hulu early, in three years.

    Michelle Chapman contributed to this report.

    Tags:DisneyHulu



    DirecTV calls off acquisition of rival Dish, possibly ending a yearslong pursuit

    Friday, November 22, 2024
    Dish Network satellite dishes are shown at an apartment complex in Palo Alto, Calif., Feb. 23, 2011. (AP Photo/Paul Sakuma, File)

    DirecTV is calling off its planned acquisition of rival Dish after the offer was rejected by bond holders at that company.

    The deal was reliant on Dish bond holders agreeing to trade in the debt they held for debt in the new company, a swap that would have cost them about $1.6 billion, collectively.

    The retreat by DirecTV this week may end a years-long effort by the company to acquire both Dish and Sling after it announced the bid in September.

    DirecTV was looking to acquire Dish TV and Sling TV from its owner EchoStar in a debt exchange transaction that included a payment of $1, plus the assumption of approximately $9.8 billion in debt. The deal was contingent on several factors, including regulatory approvals and bondholders writing off debt related to Dish.

    "While we believed a combination of DirecTV and Dish would have benefited all stakeholders, we have terminated the transaction because the proposed exchange terms were necessary to protect DirecTV's balance sheet and our operational flexibility," DirecTV CEO Bill Morrow said in a statement.

    The prospect of a DirecTV-Dish combo has long been rumored, and reported talks resurfaced over the years. And the two almost merged more than two decades ago — but the Federal Communications Commission blocked the deal valued at the time at $18.5 billion deal, citing antitrust concerns.

    The pay-for-TV market has shifted significantly since. As more and more consumers tune into online streaming platforms, demand for more traditional satellite entertainment continues to shrink.

    DirecTV says that it will continue to invest in next-generation streaming platforms and offer new packaging options while integrating content from live TV alongside direct-to-consumer... Read More

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