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Disney’s Chapek Hints at All-in-One Streaming App Once Hulu Secured

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Walt Disney Co.


DIS 0.66%

Chief Executive

Bob Chapek

said the company could eventually group all its streaming products under its flagship Disney+ app, and could tie that service more closely to its theme-parks business.

Speaking Wednesday at a Goldman Sachs investor conference, Mr. Chapek said that “there’s a little bit of consumer friction” for streaming customers who want to shift between

Disney’s

family-focused and franchise content in Disney+—home to its Marvel superhero, Pixar and Star Wars movies and series—and the general entertainment content of Hulu or sports-focused content on the ESPN+ app.

Viewers must toggle between different apps on their smartphones, televisions and other devices to watch content on each service. Placing all three services under one umbrella in a single app would reduce that friction, the Disney executive said. The company has already experimented with such a model in Europe, where the Star streaming brand, which includes many shows that also air on Hulu, is already part of Disney+.

The launch of Disney+ has brought a bit of magic to a company whose stock had taken a nosedive after the coronavirus shut down theme parks and movie theaters. WSJ explains how Disney’s streaming platform has become a top competitor in an already crowded field. Photo illustration: Jacob Reynolds/WSJ

Mr. Chapek referred to this sort of packaging, in a single app, as a “hard bundle,” as opposed to the softer bundles it already offers in the U.S., where consumers get a price discount for signing up for several services but they remain on separate apps.

In order to integrate Hulu into an all-in-one app, Disney must take full ownership of that service, which is now one-third owned by

Comcast Corp.’s

NBCUniversal, Mr. Chapek said. Under a 2019 agreement, Disney had the right to force a sale of Comcast’s stake at fair-market value, starting in 2024, with a floor valuation of $27.5 billion for the whole service. Comcast can require Disney to purchase its stake.

Other media companies are moving to simplify their offerings.

Warner Bros. Discovery Inc.

has said it would combine its Discovery+ service with HBO Max.

Paramount Global

is considering closing its Showtime streaming service and merging its content into Paramount+, The Wall Street Journal reported this week.

Last month the activist investor

Daniel Loeb

announced that his hedge fund, Third Point LLC, had renewed its stake in Disney. In a letter to Mr. Chapek, he pushed for a menu of changes at the company, including that it negotiate to buy out Comcast’s share of Hulu sooner than the 2024 deadline, even if it means paying a small premium.

“I do believe that we’d have to have full ownership of Hulu to integrate it into Disney Plus,” Mr. Chapek said. “We would love to get to the endpoint earlier.”

One big challenge is for Disney and Comcast to agree on Hulu’s fair valuation. In remarks at the same conference, Comcast Chief Executive

Brian Roberts

talked up Hulu, saying its value should be based on what bidders would be willing to pay for the company if it was auctioned. He said Comcast would be among the interested parties in that hypothetical scenario.

“I believe if it was put up for sale, Comcast would be interested. So would a lot of other tech and media companies,” Mr. Roberts said. “I think it’s got tremendous value, and, you know, I’m sure others share that belief.”

Mr. Chapek also said Disney is seeking to further unify its parks business and its media and entertainment content business by using data on consumer behavior gleaned from the company’s apps. Part of the idea, he said, is that what people do at theme parks will influence what is presented to them on Disney+, and the company could feed parkgoers information that influences their experience based on what they watch on Disney+.

Under such a plan, Mr. Chapek said, Disney+ will become “a platform for consumer engagement” for the entire Walt Disney company, rather than just a streaming-video service.

“You add in things like the membership platform, you have to step back and look at this as Disney is a lifestyle, it’s a lifestyle brand,” he said. “And it’s not just a bunch of small businesses put together that sort of de facto create a lifestyle, but we need to embrace that.”

The Journal reported recently that Disney is exploring ways to harness its consumer data and build a membership program akin to Amazon Prime.

Mr. Chapek, who has led Disney for almost three years, also said that ESPN is a key part of Disney’s long-term strategy and that the company doesn’t intend to sell it—a suggestion that Mr. Loeb had initially made in his letter. Mr. Loeb backed off on that request through statements on Twitter on Sunday.

Write to Robbie Whelan at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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