On November 9, 2017, Disney announced they expect to lose an additional $100 million next year on Hulu. Most of this is reportedly due to increased costs from the launch of Hulu’s live TV streaming service. According to reports, 70% of the loss will be taken in the first quarter of the 2018 fiscal year.
Disney is not alone in losing money because FOX reported a loss of $62 million on Hulu this month related to their 30% ownership of Hulu.
Now while that sounds bad, losses like this are normal when new companies launch or old ones launch new services. New equipment is needed and the cost to build the platform all comes before you sign up a single new customer. Let’s not forget the cost of an aggressive marketing campaign.
There are also other costs including content and the expense of negotiating contracts with networks to offer live TV.
Yet there is good news here. According to Disney’s CEO Bob Iger Hulu’s live TV investment is paying off. “We’ve seen some nice numbers there. It will be a significantly valuable business for us,” said Iger.
It is likely that other live TV streaming services also saw similar losses at their launch. Though with Hulu’s ownership being split between Disney, FOX, Comcast, and Time Warner makes these losses more visible.
Source: Home Media Magazine
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