The next generation of storytelling should be, the Hulu-Disney+ merger should go during Iger’s second term – The Streamable

The next generation of storytelling should be, the Hulu-Disney+ merger should go during Iger’s second term – The Streamable

The Walt Disney Company shattered the calm of the holiday week Sunday night when they announced that CEO Bob Chapek was out, and former CEO Bob Iger was back at the top of the company. Chapek’s minor missteps were many, but the $1.5 billion loss suffered by the company’s streaming segment in its fiscal fourth quarter was the last straw.

Now Iger has some big decisions to make, and quickly. The company’s announced launch of an ad-supported tier, accompanied by a price increase for the ad-free tier, is just over two weeks away. Iger isn’t likely to veer away from that launch as it will help boost average revenue per unit (ARPU) in the short term, but more streaming questions immediately pop up once it does.

One that likely won’t get nearly the attention of others in the immediate future is whether or not the returning CEO will keep Chapek’s plan to integrate “Next-Gen Storytelling” on Disney+. Another less pressing question — at least in the short term — is whether Iger will keep Hulu as a separate streaming entity, or fold it into Disney+ when the company takes full control in 2024.

Next-Gen Storytelling is an ambitious proposition, where Disney plans to use augmented and virtual reality elements to bring additional elements to experiences beyond what can normally be achieved via streaming. A cornerstone of this project will be to offer users a way to explore Disney’s theme parks from the comfort of their own homes. Next-Gen Storytelling would not only put users on virtual rides like Space Mountain or Star Tours, it would allow them to get up from their virtual seat and walk around the ride itself, or explore other park spaces that even personal guest users don’t get to enjoy .

If Iger wants to make Disney+ the ultimate celebration of all things Disney, it makes the most sense to keep the Next-Gen Storytelling plans in place, if it can be done relatively cheaply. Disney is so well known for offering a unique brand of consumer experience that bringing some of the famous Disney “magic” to even more fans should only help keep those customers loyal for life. Because they already own the most successful theme park business in the world, Disney is in a unique position to offer experiences like Next-Gen Storytelling, and it should take advantage.

As well as making moves that enhance the Disney brand, it would fit with Iger’s original vision for Disney+ if the company under his leadership decided not to move forward with a possible merger of the service with Hulu. Disney is contractually able to buy the 33% of Hulu it doesn’t own from Comcast starting in 2024, and during Chapek’s tenure he made several comments about the possibility of combining the two services when the purchase is eventually completed.

On the surface, this seems to make a lot of sense. That would reduce friction across services, making all Disney-owned video-on-demand content readily available in one destination. A report from earlier this year showed that the Disney Bundle, which allows users to subscribe to Disney+, Hulu and ESPN+ for a lower price, drives only moderate traffic across services. Integrating Hulu’s content into Disney+ will certainly encourage users to watch content from both services more often, making the combined service a more central part of their daily routine.

But if Iger wants to align Disney+ more closely with the family-friendly Disney brand he champions, it would make sense to keep the services separate. Hulu already has an established brand of general entertainment, and there are more ways to generate cross-service traffic than simply bundling services together. Disney could easily add a Hulu chip to Disney+ that takes customers to a separate page, plus it could send shows to Hulu temporarily to raise their profile, as it currently does with the Star Wars political thriller “Andor.”

Iger will also consider pulling R-rated material from Disney+. Movies like “Deadpool” and “Logan” would fit nicely on Hulu, which already has a reputation for carrying high-quality content that’s more adult-oriented. The move of adult content to Hulu will highlight what both brands do best: Disney+ distributes family-friendly content, while Hulu is an excellent entertainment destination for adults.

It will be a fascinating few months to see what Disney’s next step is. The move from Chapek to Iger happened very quickly and without warning, which suggests that the company believes that major changes are soon needed. What these changes will look like remains to be seen, but Iger is clearly no novice. If he wants to do his best to improve the Disney brand again, he’ll move forward with the company’s next-generation storytelling plans, but he’ll steer clear of a Hulu-Disney+ merger.

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