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Disney Expects to Lose $100 Million on Hulu Next Year

Disney is expecting to lose at least $100 million on Hulu next year thanks to the streaming service's foray into live television. According to comments made by Disney CFO Christine McCarthy (first spotted by Home Media Magazine), the heightened losses are "driven by Hulu's investment in its digital MVPD service and higher content spending." The news outlet was quick to note that 21st Century Fox also reported a $62 million loss tied to its investment in Hulu.

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Like many streaming outfits, Hulu has increasingly been spending significant money on developing original content.

And while expensive, creating content from scratch is often less expensive than securing licensing rights from a bevy of broadcasters, many of which are still fearful of disrupting the traditional cable TV cash cow. So far these efforts have proven lucrative, with Hulu original program The Handmaid's Tale cleaning up at the Emmy's last award season.

All told, Hulu is spending $2.5 billion on original programming and content licensing as it faces increased competition from the likes of Netflix and Amazon. Originally, Hulu's broadcast owners (Viacom, Disney, 21st Century Fox, and Time Warner (soon AT&T)) treated Hulu as little more than a glorified advertisement for traditional TV. That attitude has clearly shifted in recent years as Hulu has dramatically ramped up its on demand catalog and pushed into live TV streaming with a $40 per month live option that entered beta back in May.

That said, it's worth noting that co-owner Comcast was barred from engaging in management decisions as part of a condition attached to its acquisition of NBC intended to keep Comcast from hamstringing the traditional cable competitor. Those conditions expire next year, and it wouldn't be particularly surprising to see Comcast NBC/Universal taking actions that ultimately undermine Hulu's potential threat to traditional television.

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Ostracus
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Henderson, KY

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Ostracus

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quote:
Those conditions expire next year, and it wouldn't be particularly surprising to see Comcast NBC/Universal taking actions that ultimately undermine Hulu's potential threat to traditional television.
Doesn't matter. People are already complaining about too many streaming choices. One disappearing will not hurt too many feelings.