Bob Iger’s Grand Streaming Vision Is Finally Coming Together
A few months prior to the launch of Disney+ in November 2019, Bob Iger offered Wall Street analysts a pretty simple rationale for why he was keeping the new streamer’s mandate tightly focused on family-friendly entertainment and big Mouse House brands such as Marvel and Star Wars. With Hulu and ESPN+ already well-established, he explained, “Rather than creating one gigantic fat bundle of sports, general entertainment programming, and family programming, we thought we’d serve the consumer better by segregating all three.”
Five years later, Disney still has three separate streaming apps, but the days of strict separation of genres? As of this week, those days are over.
On Wednesday, Disney+ debuted a new ESPN tile which allows anyone who pays for ESPN+ as part of the Disney Bundle to stream everything on that service via the Disney+ app. In that respect, it’s pretty much identical to the Hulu on Disney+ initiative the company debuted earlier this year, though as my colleague Savannah Salazar wrote, there are some differences. What this rollout also means is that, for the first time ever, anyone who subscribes to the so-called Disney Trio bundle can get the Magic Kingdom’s full streaming portfolio via a single app experience — no flipping required. That “one gigantic fat bundle” Iger low-key dissed a half-decade ago is now being touted by Disney as “a seamlessly integrated viewing experience … that only The Walt Disney Company can deliver.”
There’s no way the company that puts hotels and shopping centers in the middle of its theme parks wasn’t going to put its entire streaming offering under one roof.
This might seem like a pretty big flip-flop, but A) times change, and B) compared to Netflix’s reversal on advertising and password sharing, Iger’s evolution barely registers on the corporate hypocrisy meter. Plus, as noted, Disney, at least for now, does let consumers choose more narrowly focused streaming apps if that’s what they want.
It’s no great mystery why Iger and Disney opted to change course, nor is it anywhere close to a surprise. For one thing, back in 2019, Disney didn’t have full financial control of Hulu yet (Comcast was still a partial owner), something which would have made a blurring of the lines between platforms much more difficult. I’m also not convinced Disney had the engineering know-how back then to handle a supersized app with live sports and Hulu content and the vast Disney+ library, or that it would have been wise to force existing Hulu customers to pay a lot more for Disney or ESPN programming they didn’t want. Iger’s go-slow approach was the right call at the time.
Instead of consolidation, Iger introduced the Disney Bundle, which let folks pay one bill for two or three different services even as they still watched via separate apps. It was a good way to reduce subscriber churn and encourage Disney superfans to maximize their TV experience. But the one flaw of that approach has always been that, with so many viewing options, if a heavy Hulu user forgets to check out Disney+ for a few days (or vice versa), they’ll begin to think they’re not getting enough value out of their subscription and be more likely to downgrade or cancel altogether. That’s why Netflix offers so much programming: Even if you’re not digging their last couple of original series, they’re betting you’ll stick around for one of their movies, stand-up specials, or, more recently, their overhyped sporting events. That’s a tougher sell when programming is diffused across multiple apps. So even if the Disney Bundle was a good stopgap measure, having Hulu and ESPN programming integrated into the same app where Disney+ programming lived always made more sense.
And so, from almost the moment D+ launched, it became pretty clear that Disney brass would eventually change course and find a way to offer the streaming equivalent of the “E Ticket” that the company offered at its theme parks up until the mid-1990s. Synergy is built into the very DNA of The Walt Disney Company; there’s no way the company that puts hotels and shopping centers in the middle of its theme parks wasn’t eventually going to figure out a way to put its entire streaming offering under one carefully imagineered roof. That’s why, when Disney started to experiment with streaming some ESPN+ programming on Hulu (not Disney+) back in 2021, I wrote that I “wouldn’t at all be surprised if Disney eventually lets consumers stream all three platforms via one app.” Or why, even earlier, less than a year after Disney+ debuted, I was already convinced of the need for a single-app experience:
Disney understandably wants to keep Disney+ very tightly focused on family-friendly programming, but why shouldn’t reruns of Black-ish or The Conners live on Disney+ in addition to Hulu?… And while I get the importance of making sure parents know that Disney+ is totally kid-safe, it seems counterproductive to force consumers who pay for the Disney bundle to switch between three apps to find content owned by the same company….It seems illogical to draw digital borders between the various lands within the Disney streaming kingdom.
To be clear, this doesn’t make me some sort of streaming Nostradamus. The consolidation of Disney streaming apps is something numerous analysts and journalists have been talking about for years. Honestly, even folks I talked to at Disney always said this was on the drawing board. The only debate, really, had been how quickly things would evolve, and whether Disney would also just kill Hulu outright and do what Iger said he didn’t want to do in 2019, i.e., give audiences no other option but to pay for a single, supersized app. At least for now, Iger seems to have settled on giving consumers choice.
One App to Rule Them All?
Now, of course, the question is whether in, say, another five years, Disney will still think it makes financial sense to pay the overhead needed to maintain standalone Hulu and ESPN apps and infrastructure, or whether there are even enough stand-alone Hulu and ESPN+ customers left to justify their existence. As my colleague Savannah notes below, the coming launch of ESPN’s new flagship app next year (and its likely huge price tag) suggests Disney is going to at least keep a separate sports-only experience viable for a while. But as for Hulu … I’m not so sure. People have been predicting the app’s demise since the moment Disney decided it was launching Disney+, so I’ve learned to never count it out.
That said, one of the most interesting parts of this week’s rollout of ESPN on Disney+ was the announcement that Disney would be giving all of its subscribers — even those who pay only for Disney+ — the ability to watch a notable amount of programming from Hulu and ESPN at no extra charge. FX’s Emmy-winning Shogun and ESPN staples such as Pardon the Interruption, along with thousands of live sporting events, will be available to all Disney+ customers, regardless of bundle status. As Disney+ president Alisia Bowen told Savannah and the other reporters who attended a press event earlier this week, this strategy will “allow those standalone Disney+ subscribers to really explore and experience a sampling of our great sports and general entertainment content” and will “make it easier to see the full value of our bundle.” And if folks like what they see, or want to see more of it? “They’ll have easy ways to upgrade their subscription to unlock full access to the complete content lineup,” Bowen said.
What Disney is doing with this sampling approach is not unlike what Amazon’s Prime Video has been doing for years with its channels store. Prime customers are regularly given access to full seasons of a show on, say, BritBox or MGM+, and then, when it’s time to watch season two, they’re prompted to add on a subscription to that service. While some folks find this annoying and gimmicky, it clearly works, since so many streaming platforms continue to give Prime the ability to preview their wares. Given upgrading from basic Disney+ to a duo bundle with Hulu costs just $1 more per month, this free programming could serve as a powerful enticement to upgrade.
In any case, regardless of whether Hulu continues as its own independent app, it’s pretty clear that Disney is going to be relentless in trying to get as many of its current Disney+ or Hulu standalone subscribers to upgrade to a bundle with both. What happened this week should make that goal a lot more achievable.
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