Could The New Disney+/Hulu App Dethrone Netflix?
As of December, Disney has integrated Hulu into Disney+ in a beta version with a wide launch planned for March. On paper, that may sound like old news after Paramount+ and Showtime and HBO Max and Discovery+ pulled off similar consolidation in recent years. But much like a seemingly overlooked easter egg in a Marvel series, this is a significant development for the streaming industry in several ways.
First and foremost, the combination of Disney+ and Hulu libraries helps to create true four quadrant appeal for the unified service. According to Parrot Analytics audience demographic data Disney+ originals tend to over-index with a younger male generation while Hulu originals tend to resonate more with older female audiences. If we zoom out and account for entire libraries on both platforms, Disney+ connects most with male audiences and 55.4% of its audience is aged 13-29. Hulu, meanwhile, over-indexes with female audiences and has a higher share of Gen X+ viewers than Disney+. These are complementary audience concentrations that speak to valuable broad appeal when combined. That’s crucial to reigniting subscription growth as Disney+ hits a ceiling with franchise programming and Hulu’s originals can occasionally struggle commercially.
Furthermore, total catalog demand share data takes into account both licensed and original TV series and movies available on a platform and is a good indicator of which SVODs consumers are more likely to use as a default streaming home. Combined, Disney+ and Hulu account for a whopping 24.4% total catalog demand share, easily besting market-leader Netflix (17.3%) in the US as of Q3. This suggests a Disney+/Hulu streamer could threaten Netflix as the first living room streaming entertainment option. And while raw scale is not an inherently valuable trait in the streaming wars without quality and strategy behind it, a single Disney+ and Hulu service would also boast the second largest library by total titles among the eight premium SVOD players.
In-house streaming consolidation could lead to cost-savings, recommendation and discoverability improvements in order to unlock the full value of the combined library, and new potential growth. All of these criteria are crucial as Disney seeks to turn a streaming profit in 2024. Success or failure to reach consistent direct-to-consumer profitability will yield notable rippled effects both within Disney and throughout the industry.
