The deal comes ahead of the launch of the streaming service Disney Plus, available in the U.S. November 12. In April, AT&T sold its minority stake in Hulu in a deal that valued the streaming service at US$15 billion and left Disney and Comcast as the only remaining owners. Meanwhile, AT&T’s CEO said Tuesday that the company will pull content from streaming rivals as it prepares to launch its own streaming service in late 2019. (Wall Street Journal, Dallas News)
Talking point: The deal gives Disney the ability to bundle offers of Hulu and Disney Plus. The development is yet another blow to Netflix, which saw its market value drop by US$8 billion after the Disney Plus announcement. Disney’s streaming service will be offered at US$7 a month compared to Netflix’s US$11. While Disney Plus will focus on family content, the potential pairing with Hulu’s more adult-focused service further solidifies Disney’s ability to rival Netflix. AT&T pulling content is a risk to Hulu and Netflix, which both rely on the media company’s popular content—in 2018, Netflix spent US$100 million to end a bidding war for the rights to AT&T’s “Friends.” One way to mitigate that risk is focusing on original content, which is what Disney Plus is based on.