The Disney+/Hulu Combo Platter: Ultimate Churn Solution Or Too Much Of A Good Thing?
The ongoing combination of Disney+ and Hulu in the US continues to stir up equal parts skepticism and optimism from all corners of the industry, especially with earnings season right around the corner. Do differentiated bundles create more value for consumers or single app super services? What works for some may not work for others.
One compelling element of the Disney+ and Hulu consolidation is the relatively complementary content libraries in terms of age. When looking at the US catalogs for both from Q3 2023 to Q2 2024, we see that a whopping 76% of Disney+’s library is at least five years old while Hulu’s stands at 63%, according to Parrot Analytics’ Content Panorama. Crucially, just 12% of Disney+’s library is between one and three years old while 20% of Hulu’s falls into that category.
To make a long data-driven story short: Hulu relies on fresher programming compared to Disney+’s older-skewing library. This makes sense.
Outside of Disney’s steady diet of blockbuster franchise originals, it is the studio’s deep and iconic library of enduring pop culture mainstays that stands out. When looking at the 10 most in-demand titles on Disney+ in the US year-to-date, the most recent film/TV series premiere was 2019. The oldest was 1989 (shout out to The Simpsons).
Meanwhile, Hulu is the go-to destination for next-day air of linear series. That’s precisely why still running library titles like Law & Order: SVU, Family Guy and Grey’s Anatomy, as well as recently concluded linear series such as The Resident and Bob’s Burgers continue to resonate on a larger scale. Then there’s the Hulu originals such as The Bear, Shogun (technically an FX original, but you get it), Under The Bridge and The Handmaid’s Tale that also deliver more recent bursts of engagement.
Disney+ is more top-heavy in its primary catalog offerings. Legacy movies and Marvel/Star Wars originals are largely the biggest needle-movers. Many of its original series cater towards a younger male audience. Hulu, as a conduit for popular linear programming and an emphasis on international content, skews older and more female as it differs considerably from the core Disney+ offering.
On paper, the two services create a broad library that appeals to a vast array of different consumers versus the slightly more segmented core audiences each service programs to on its own. Naturally, we can expect a greater rate of on-platform retention and consumption affinity since the library consolidation. That should help improve the lifetime value of each subscriber, though the Disney Bundle (Disney+, Hulu, ESPN+) already boasted lower churn rates than each individual service.
But it remains to be seen if the single-service app provides a boost in customer acquisition as well. Such a strategy has been met with mixed results in the market thus far (see: Paramount + With Showtime, Max, etc.). If content truly is king, then the franchise fatigue and divisiveness surrounding Marvel, Star Wars and Pixar, as well as the inconsistent commercial performance of Hulu originals, will be a difficult wall to scale for the Mouse House.
