Update: This is now official and you can read the full updated story HERE.
In a move that could reshape the landscape of online television, Walt Disney Co. and streaming provider FuboTV Inc. are reportedly nearing a deal to combine their live TV businesses. Sources close to the matter reveal that Disney plans to fold its Hulu + Live TV service into Fubo, creating a new entity that would become the second-largest digital pay-TV provider in the US, according to a report from Bloomberg.
Under the proposed agreement, Disney would hold a 70% stake in the new venture, with Fubo retaining the remaining 30%. The deal specifically focuses on the live TV components of both services, leaving Hulu’s on-demand streaming library untouched. Both the Fubo and Hulu + Live TV brands will continue to operate independently.
This merger would unite two significant players in the increasingly competitive online TV market. Combined, the services boast approximately six million subscribers, positioning them as a formidable challenger to YouTube TV, the current industry leader.
The deal also brings an unexpected resolution to a legal battle between the two companies. Fubo had previously filed a lawsuit against Disney, Fox Corp., and Warner Bros. Discovery over their joint venture, Venu Sports, alleging anti-competitive practices. As part of the merger agreement, Fubo will reportedly drop these claims, clearing the path for Venu Sports’ launch.
This strategic alliance comes as consumers increasingly seek alternatives to traditional cable and satellite television. By joining forces, Disney and Fubo aim to capitalize on this trend, leveraging their combined strengths to attract and retain subscribers.
For Fubo, the deal offers a much-needed boost. The smallest of the virtual TV operators, Fubo has grappled with high programming costs and subscriber churn. Partnering with Disney provides access to valuable resources and content, potentially stabilizing its position in the market.
For Disney, the merger allows them to expand their reach in the live TV streaming sector while streamlining operations. By offloading some of the operational burden to Fubo, Disney can focus on content creation and other strategic initiatives.
While the deal is expected to be announced this week, sources caution that negotiations could still falter. Representatives for both Disney and Fubo have declined to comment.
If finalized, this merger could have significant implications for the future of online television, potentially sparking further consolidation and intensifying competition among streaming providers. As viewers continue to embrace streaming options, the battle for their attention and subscription dollars is only just beginning.