Disney (DIS - Free Report) recently signed a deal with Hulu to produce four animated series from its Marvel Studios.
The adult series will be based on Marvel television characters — Hit-Monkey, Tigra and Dazzler, Howard the Duck and Mental Organism Designed Only for Killing (M.O.D.O.K). Apart from individual series, all the four characters will feature together in an animated special, The Offenders.
Notably, Hulu already streams Marvel’s live-action TV show called Runaways.
Strong Content Lineup Aids Hulu
Disney is looking to cash in on the popularity of Marvel characters by producing content centered on them for Hulu and Disney+. Disney is working on a TV series based on Marvel Cinematic Universe characters including Loki and Scarlet Witch for its streaming service.
Notably, Marvel Studios, which has a popular film slate and TV shows, recorded worldwide box office collectionsof approximately $17.6 billion in 2018.
We believe that the current deal is a result of Disney’s efforts to add more content to Hulu’s platform and take the service international after it acquires majority stake in the service. Notably, Disney, which currently holds 30% stake in Hulu, is entitled to another 30% stake after it acquires Twenty-First Century Fox (FOXA - Free Report) in the first half of calendar year 2019. Comcast owns 30% stake in Hulu and AT & T the remaining 10%.
Disney’s move to add more licensed content to Hulu is in the right direction as 89% of Hulu subscriber’s first watched licensed programming before watching original content, per 7Park Data. The move is expected to boost subscriber base and ad dollars. Hulu added 8 million U.S. subscribers, up 48% year over year, bringing the total count to 25 million in 2018. Ad revenues surged 45% year over year to $1.5 billion in 2018.
Moreover, with Hulu’s price cut of its basic ad-supported plan and Disney’s discount for all streaming services – ESPN+, Disney+ and Hulu at one go, is likely to attract users. Netflix (NFLX - Free Report) recently hiked its subscription in the range of 13% to 18% for U.S. customers.
The Walt Disney Company Revenue (TTM)