Disney may need to unite its streaming kingdoms if it wants the throne

Future. Even though Disney+ is growing steadily, some of the company’s investors believe it would be better off combining Disney+, Hulu, and ESPN+ into one super streamer, giving audiences a broad range of content choices (like Netflix, Amazon Prime, and HBO Max). There are, however, roadblocks to making that merger happen, but a combined service could keep churn at bay while taking pressures off of Disney+ to release endless expensive blockbusters in order to keep subscribers hooked.

A Magic Kingdom united
Does CEO Bob Chapek still want to keep Disney’s streamers separated?

• Chapek says the company plans on keeping the status quo, but that a future “all-in-one” offering isn’t off the table.
• For now, Disney is focused on bundling Disney+, Hulu, and ESPN+ for a discount (currently priced at $13.99), which has a lower churn rate than any of its individual services.
• But, some activist investors cite low churn as exactly why Disney should offer all its content under a single service, similar to what Disney does internationally with its Star service.

Dan Loeb, principal of Third Point and a large Disney shareholder, said that combining the services is the best way for the Mouse House “to maximize future earnings potential globally (both reach and pricing power),” allowing Disney to provide “an all-you-can-eat DTC offering on a single platform under the Disney+ brand, where all theatrical content is available day-and-date with no additional fee to subscribers.”

Seems like no one, including Disney’s biggest shareholders, like paying an extra $30 for Premiere Access films.

The battle for more
While Disney’s offered streaming bundle might generate the most revenue, it wouldn’t allow the company to claim the throne of “largest streaming service.” Netflix has 209 million subscribers, while a combined Disney+, Hulu, and ESPN+ would net Disney a total of 170 million subscribers (though there could be some overlap).

Granted, even if Disney wanted to combine all the services, there are still hurdles to clear, including complicated content licensing deals in different regions and the fact that Disney doesn’t fully own Hulu yet (Comcast will relinquish the last of its control in 2024).