Just over a year into Hulu’s full integration with the Walt Disney Company—thanks to Disney’s $71 billion acquisition of 20th Century Fox in 2019—the seeds of that partnership are starting to bear significant fruit. This year’s Best Picture Oscar winner, Nomadland, is available on Hulu, because it is a Searchlight Pictures title. FX, meanwhile, created one of Hulu’s most popular series last year, The Teacher. And the upcoming How I Met Your Mother spin-off—How I Met Your Father, which will star Hilary Duff—is based on the hit sitcom from 20th Century Fox Television.
As Hulu continues to grow—it added 2.2 million domestic subscribers in the most recent quarter, bringing its total to 41.6 million—its strategy is simple: lean even harder into the creative hubs of its parent company. And not just the Fox arteries. Hulu is working more closely with ABC News on content, such as the exclusive one-hour special, 24 Hours: Assault on the Capitol, that streamed last January. Through a new deal that Disney signed with the National Hockey League in March, select hockey games will stream not just on ESPN Plus but also on Hulu. More football is also coming to the streamer thanks to its parent company, which owns ESPN.
“The integration with Disney has really helped position us for what we believe will be our strongest year yet, with the trajectory we’re on,” Hulu President Kelly Campbell told Fast Company a few days before the company’s upfront presentation on May 18. “As part of the Walt Disney Company, we’re bringing more and more original content from within the creative engine of Disney.”
But if Hulu is flaunting its access to Disney’s vaults, it is also still selling itself on its original thesis of being the versatile streamer that provides both a library of new and old content—and live TV. “We’re the leading streaming company when it comes to giving viewers the chance to view live and on-demand all in one place,” Campbell says. “We see others try and replicate that, because that’s what consumers want. But we’ve been a consumer-led company from day one. That’s been our model since [Hulu] launched live TV in 2017.”
This combination of access to deep libraries of content and creative teams, as well as a Swiss army knife-like utility, are Hulu’s twin weapons in the streaming wars, which have become significantly more competitive since 2017. Indeed, as services like HBO Max, Peacock, and Disney’s own Disney Plus have sprung up over the past few years, the question of what Hulu was—and who it was for—has become more pressing. Its signature series, The Handmaid’s Tale, is now in its fourth season in a world where people don’t expect just to stream TV series in their living rooms, but event films like Wonder Woman 1984. And as Disney’s earnings last week just proved (again), the COVID-19 bump that streamers enjoyed in 2020 is starting to wane.
To all this, Hulu says: We’ve got Disney’s firepower, and, it is inferred, all the non-Marvel, Pixar, and Star Wars stuff that lives on Disney Plus. The strategy seems to be working. Hulu’s subscriber growth last quarter was up 30% year over year. Engagement on the platform, the company says, spiked 36% over that same time period. If you go back even further, to 2019 (i.e. pre-Disney), engagement has grown 91% over the two-year period. “That’s three times that of the closest TV network,” Campbell says.
All of this, of course, will be lapped up by advertisers at this week’s upfront presentations, as will ad-friendly tools that Hulu has been rolling out, such as shoppable ad formats and “pause ads,” which are translucent, banner-like ads that show up on the side of the screen when a user pauses a video. Hulu, whose ad sales are up 35% year over year, will also be selling itself as the place to target its “young and savvy 34-year old audience,” says Rita Ferro, president of Disney Ad Sales. The average age of a Hulu viewer is roughly 34, and the streamer’s viewership “makes up 29% of all the TV minutes watched with viewers between 18 and 49,” Ferro says.
“It’s a lot of people who don’t have cable subscriptions,” she goes on. “Which is why having Hulu as part of our Disney advertising portfolio is really powerful. These are people you don’t reach with a traditional TV buy, whether it’s on broadcast or cable. We’re getting really exciting partnerships” because of “how marketers can leverage Hulu’s audience to drive the total marketplace solution.”
Behind the scenes, meanwhile, Hulu and Disney continue to marinate. When asked about the genesis of How I Met Your Father, Campbell says, “We work closely with [Chairman of Entertainment] Dana Walden and the Walt Disney TV team. They’re really driving the content creative process, and they’ll come to us for consult and collaboration. They’ll ask, ‘How will this show perform for Hulu?,’ and we’ll share insight as part of that process. That’s a really great example of how the model’s worked so far.”