EXCLUSIVE: Disney has seen a 60% jump in Hulu + Live TV subscriptions relative to internal expectations since a carriage impasse with Charter began, according to figures provided to Deadline by a Disney spokesperson.
Last Thursday, 18 of Disney’s cable networks and eight ABC stations went dark on Charter’s Spectrum service in one of the most contentious and consequential TV carriage disputes in memory.
Hulu, which has been under Disney’s operational control since 2019, launched its bundled TV package in 2017. It has steadily grown to become one of the top providers in the U.S., with 4.3 million subscribers. That ranks a bit behind YouTube TV among internet-delivered bundles, but most of the online players are actually growing at a time when cable and satellite distributors are rapidly shedding customers.
Even if it is not the leading online TV package, Hulu + Live TV offers an intriguing strategic option for Disney at a time when $2.2 billion in annual affiliate fees from Charter are under threat. After taking over Hulu in 2019, Disney began integrating the live service with major platforms like Disney+, on-demand Hulu and ESPN+. It also experimented with marketing messages that would be anathema to the traditional domain of cable trucks and set-top boxes, urging customers to turn Hulu + Live TV on and off based on seasonal viewing interests, particularly sports. In 2021, Disney+, on-demand Hulu and ESPN+ were integrated with Hulu Live at no extra charge, though the initiative also came as prices for the live package went up $5 a month.
The surge in Hulu + Live TV subscriber activity also coincides with news of a sped-up timetable for Comcast to sell its one-third financial interest in Hulu to Disney. In an appearance at a Goldman Sachs investor conference, Comcast CEO Brian Roberts said the process will now begin September 30 instead of next January. He painted a rosy picture of Hulu and called out its bundling potency, though he didn’t specifically mention the live TV bundle. “You get all of the content and all of the bundling,” he said, indicating the final valuation would far exceed the $27.5 million floor agreed to by the companies in 2019.
The gains in recent days at Hulu + Live TV have primarily come as a result of Disney’s own promotion, as Hulu’s live service has not been among those recommended to consumers by Charter. There has been an uptick in marketing for the service across the usual channels, including social media. Given the current surge in viewer demand for live sports — the carriage fight went public during the U.S. Open tennis tournament and with college and NFL football about to kick off — Charter made the unusual move of referring customers to rival providers. The company even teamed up with one of them, Fubo, to offer a discount to new subscribers.
The logic of sending customers across the street is that Charter hopes to continue providing broadband service to customers who drop their TV service. By encouraging a switch to an internet-delivered bundle (as opposed to a satellite provider or Verizon FiOS, which are available in many Charter markets), the outcome can still benefit Charter. Disney’s blog post over the weekend, while it made prominent note of Hulu + Live TV, also points Spectrum customers to a website where a handful of other internet TV providers are listed.
Inquiries by Deadline to several other internet TV bundlers, including YouTube TV, Fubo and DirecTV, did not elicit any on-the-record comments about subscriber trends during the outage.
A period of stasis has set in around the carriage negotiations since the fusillade of initial statements, which started last Thursday evening and went through Labor Day weekend. Charter declared last Friday that it was prepared to “move on” from the video business unless a speedy resolution were to be reached with Disney. That vow has rattled investors and a host of stakeholders in the ever-more-fragile TV bundle. Each year, cord-cutting has accelerated and a withdrawal by the No. 2 cable operator (with 14.7 million customers) would deal another major blow.
Programmers (including Disney) have been increasingly prioritizing streaming of late, creating friction with some distribution partners. Disney has refuted Charter’s claims that it wants to charge customers twice for content available on Disney+ and Hulu as well as general entertainment cable networks.