Who’s Thriving and Who’s Struggling: Annual Streaming Scorecard Part Two

In 2023, the streaming industry underwent a significant transformation, shifting away from the frantic growth of previous years towards a more pragmatic approach. Viewers continued to abandon traditional PayTV in droves in favor of streaming platforms, leading to an overall stabilization of subscriber levels, but at a much lower price point.

Notably, Netflix maintained its position as the industry leader, bouncing back from the challenges it faced the previous year. However, the focus for streaming platforms has evolved, with profitability now taking precedence over explosive growth, as media conglomerates face strong economic headwinds. These challenges have led to endless consolidation talks and further shake-ups among the largest media companies in the world.

Throughout January and February, FilmTake will explore the advantages and challenges facing the leading streaming services, which started with Apple TV+ and continues with a review of Disney-owned services Disney+ and Hulu.

Disney’s Streaming Horizons: Quality Challenges and Uncharted Waters Ahead for Hulu and Disney+

Disney had its fair share of challenges and triumphs in 2023. While it’s indisputable that Disney’s streaming business is still operating at a loss, there’s a glimmer of hope as the deficits shrink. In the fiscal fourth quarter, Disney reported a significant drop in streaming losses, from $1.4 billion in 2022 to $387 million in 2023. However, the cost-cutting measures came at the expense of sweeping layoffs and legal disputes over accounting practices.

One of Disney’s primary challenges in 2024 is the need for fresh content. Overreliance on well-known IP from Marvel and Star Wars has left audiences exhausted and yearning for more originality. Many fans have lost interest or are in all-out rebellion after repeated perceived slaps in the face. The arrival of new theatrical and episodic takes on dormant IP may provide the fresh air Disney+ desperately needs.

Disney’s advantage lies in mining its vast library of content for theatrical gold to once again captivate audiences, making Disney+ the go-to streaming service or at least a non-cancellable service.

Moreover, the integration of Disney+ with Hulu is poised to test the limits of bundling and pricing in a complex sea of options.

Hulu’s Journey for Clarity Amid Continued Confusion

In the parallel universe of Hulu, 2023 was a year marked by ownership clarity and continued user interface confusion. Comcast and Disney grappled with untangling the former’s 33% stake. In a momentous move, Disney penned an $8.5 billion check, finally asserting full ownership, which signals the beginning of a valuation process for the streaming giant, as the 2019 agreement between Comcast and Disney established a floor for the deal, with any additional payout contingent on ongoing evaluations.

As Hulu’s fate hangs in the balance, Comcast hopes for more payouts but will likely end up in litigation against Disney for diminishing the service’s value through its future integration into the Disney+ one-app ecosystem.

Despite dwelling in uncertainty, Hulu’s content catalog prospered, crowned with critically acclaimed and award-nominated gems, especially under the FX on Hulu banner. The streamer ended 2023 will 48.5 million subscribers. But the challenge for the family-oriented Disney streaming service lies in harmonizing the user interface of the one-app to shine a spotlight on Hulu’s offerings.

While Hulu has been making strides, it still grapples with an outdated user interface that makes navigation cumbersome. In 2024, the challenge for Hulu will be to balance its library of original content, including FX on Hulu titles, while improving the user experience.

Making matters more complex, Disney has hinted that its traditional television business, including its broadcaster ABC and cable channels National Geographic and FX, could be on the chopping block, which would have massive repercussions for Hulu. Disney may have a buyer in mind for acquiring both Hulu and its broadcasting and cable channels simultaneously.

Furthermore, integrating Hulu into the Disney+ one-app ecosystem would add more complexity to an already confused and tapped-out subscriber base. Many are predicting the closure of Hulu as a standalone service with full integration into Disney+ is all but a foregone conclusion.

Uncover What Streamers Like Hulu Pay to License Third-Party Films and Shows Worldwide with Distribution Intelligence from FilmTake.

Worldwide Film & Television Distribution Intelligence

Get unparalleled access to market intelligence reports that draw on financial data and insights from dozens of content distribution deals worldwide between key industry participants.

Film and Series distribution rates and terms deriving from dozens of agreements for rights to transmit films and episodic television via PayTV and SVOD.

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Licensing Terms & Included Programs:

Pay-1 & SVOD Rate Cards for Motion Pictures and Series Exhibited Worldwide in Multiple Availability Windows

  • Motion Pictures: Pay-1, First Run, Second Window Features, Recent Library Features (Tiers AAA,A,B,C), Library Features (Tiers AAA,A,B,C), Current and Premium Made-For-TV Films and Direct-To-Video Films, covering many license periods over the last decade
  • Episodic TV: Current, Premium, Premium Catalog (1HR & 1/2HR), Catalog Series (1HR & 1/2HR), and Catalog Miniseries + Case Studies on Current Mega Hit, Catalog Mega Hit, and Premium Catalog, covering many licensing terms from 2012-2024
  • Because most-favored-nation rates operate in practice, the rates and terms apply to a diverse range of content and distributors worldwide in multiple availability windows.

Reimagining Theatrical Success with Unexplored IP

Disney’s historical focus on blockbuster franchises has proven lucrative, but it also comes with immense pressure to consistently deliver box office hits, especially as production budgets explode.

Shifting towards a strategy of creating noteworthy low-cost, high-concept movies with a clear path to profitability could provide a more sustainable approach by reducing the risk associated with solely depending on a handful of mega-budget tentpole films. As an added bonus, Disney could find more suitable creative leaders to turn around the downward slide of Marvel and Star Wars properties.

Disney’s attempts to convert its IP into streaming series have only delivered mixed results. While Marvel and Star Wars series find success, others struggle to make an impact.

Instead of developing projects from expensive IP, Disney could mine its extensive library for truly new spins that could connect with theatrical audiences or, heaven forbid, create new audience-pleasing characters and concepts.

Producers of all stripes must balance blockbuster ambitions with nimble, cost-effective content creation in a world of peak content and intense competition.

FilmTake Away: Turning the Tide or Capsizing?

As Disney+ charts its course in 2024 away from the rocks, the challenges are palpable, mainly finding freshness in a sea of familiar content.

And the biggest question, which hangs in the air like a cliffhanger, is how the Disney+ one-app integration with Hulu, set to exit beta in March, will fortify the service and retain its subscribers.