1. Hulu Is Now 100% Disney

In a move that’s been rumored for a while now, Disney announced that it was buying Comcast’s share of Hulu, which will give it full ownership of the new service. The deal gives Disney immediate operational control over Hulu, while Comcast holds onto its shares for four and a half years, at which point it can force Disney to buy them or Disney can force Comcast the sell them the shares. Comcast also gets to start pulling back some of its content later this year, making what was once exclusive, non-exclusive, and pulling out completely from other deals.

Why It Matters

Disney now has a third leg to its OTT stool and can roll out Hulu internationally together with Disney Plus and ESPN Plus.

It gives them a place to put all that R-rated content, non-Disney library content, and to create a more adult-oriented originals network that occupies the name mindspace as HBO.

It gives them a very successful vMVPD, which is important to the company that owns ESPN, which relies on live viewing.

It also gives them unfettered access to all of Hulu’s institutional knowledge, everything the team learned (often the hard way) about running a streaming TV service over the years.

It gives Hulu a clear sense of ownership and purpose moving forward. It’s worth mentioning just how unlikely Hulu’s success is, given the circumstances of its birth and the multiple parties that owned the company. Which is a huge testament to its leadership who seemed, especially in the past three years or so, to have made a number of very wise decisions, from streamlining the interface, to launching the vMVPD to greenlighting originals like The Handmaid’s Tale to limiting ad pods to 90 seconds.

The result of which is that Hulu now has close to 30 million subscribers.

For consumers, the plus from this deal (pun intended) will be the resulting bundle: we’d be shocked if Disney didn’t offer to bundle all three services (Hulu, Disney+ and ESPN+) along with the Hulu vMPVD, for a very attractive price. From a consumer POV, that's a nice base to start from, and viewers can add on Flixes and FASTS as they see fit.

What You Need To Do About It

If you’re an advertiser, Hulu is the only place to reach the sizable audience that the three Disney services will have. Those 90 second ad pods are a great way to ensure that your commercials get seen without having to annoy TF out of the audience.

If you’re a rival Flix, you’ll want to relook at your content and distribution strategies in light of this, particularly what your sales pitch is to audiences, how you plan to reduce churn, and what your future bundling strategy might be.

If you’re an MVPD, especially a smaller one, you might want to think about striking a deal with Disney and letting them be your pay TV service. That three-service bundle plus broadband could prove very attractive.

2. WarnerFlix Will Not Be Ad-Free

Not that anyone really expected the company that owned Xandr to launch an ad-free service, but in light of Disney’s decision to make Disney+ ad free, it was notable that Warner confirmed that their new service would be at least partially ad supported “in Phase 2” (not 100% clear whether that means it will be all ad-free at launch and the ad-supported "Phase 2" comes ext or if it refers to the three tiers that Warner is allegedly launching. I suspect they’re not 100% sure on it either, and are thinking that they’ll figure out the whole ad supported part at some point down the road.)

Why It Matters

AT&T has a lot to figure out between now and launch, as we laid out in this article, but given Xandr and given their strong MVPD addressable business via DirecTV and given the fact that TNT, TBS and CNN are already ad supported, it all sort of makes sense.

Warner’s ad-supported OTT service will join Hulu and (eventually) NBCU and (likely) CBS/Viacom/Showtime as one of the larger ad-supported services, and the four together will greatly increase the amount of high-quality addressable OTT inventory along with the number of viewers who can be reached via that inventory.

That shift will more or less force advertisers to start taking ad-supported OTT seriously and may actually push the industry to fix the many problems and inconsistencies that brands and agencies face when trying to buy OTT. It will also push traditional linear broadcasters to start offering addressable advertising, either via initiatives like Project OAR or by biting the bullet and striking deals with MVPDs.

What You Need To Do About It

If you’re an advertiser, you need to start getting on your game about OTT advertising. (This TV[R]EV special report is a good place to start.)

If you’re the measurement industry, it’s time to agree on some basic standards around things like segmentation and attribution so that everyone can start making money off this OTT thing.

And if you’re an viewer, it’s time to get another bag of popcorn and maybe take a bathroom break, because it will be a while before AT&T figures out what their new "Warnerflix" service actually looks like.