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TV Analyst: Disney should sell Hulu for $18 billion and use money to buy Netflix or Roblox.

Emily

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Via Barrons:

According to Lightshed Partners' Analyst Richard Greenfield...

Selling the company’s 66% stake in Hulu could give Disney at least $18 billion in cash, and nix a business that is losing money as competition among streaming platforms intensifies, he said.

That money could then be reinvested into buying Netflix, Greenfield wrote.
“Disney and Netflix are truly complementary pieces in the streaming puzzle that would dominate the global war for time spent with video,” he wrote. “While linear TV is undoubtedly in secular decline as streaming TV takes over, this combination would be like entering warp speed on the transformation.”

The acquisition could help Netflix turn around its operations and shore up its subscriber loss problems, while giving Disney access to Netflix’s scale, visibility, and international content.

He also believes Disney should consider Roblox as a potential acquisition target.

Another strategic move for Disney would be to make a bid for Roblox (RBLX) — a more digestible asset with a market cap of $13.7 billion, compared with Netflix’s $78.9 billion, Greenfield added. Roblox could be an important stepping stone in helping Disney wade into gaming, and eventually, the metaverse.

Source: Barrons
 

Raccoon

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As consolidation escalates, my first question when I read pieces like this is always "but could they?" I recognize that it's entirely speculative, but could they even buy Netflix without the FTC stepping in?
 

Derachi

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I feel like Roblox is a nightmare that Disney would prooobably want no part of.
 

Mekanos

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I just want to get the ancillary Disney Fox content onto Disney+ in the US. Very jealous of other countries getting KOTH, Futurama, etc. on D+.
 

Vanillalite

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If everyone has pulled out Hulu it seems like a waste to still have it when Disney can just consolidate it all into D+.
 

Illucio

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I actually think this is a good idea. Hulu doesn't have hardly or if at all any good content exclusive to the platform. (Only thing I can think of is Animaniacs). Netflix has a lot and would benefit from Disney's branding all it's content and making each show more marketable and desirable from a merchandise standpoint and help define any new upcoming shows.

Roblox is a huge untap game market that a ton of kids plays like Minecraft, while I do think it's a good purchase for certain companies. Probably not so much for Disney who should really stay away from gaming unless they can purchase a competent game developer who can dictate and show Disney how to run that side of things. And the only company close enough to do that is Nintendo and they aren't for sale and Japan wouldn't allow the sale even to the most crazed right wing Japanese politician just from cultural reasons alone.
 

Gay Bowser

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Netflix's current (depressed) market cap is about $75B, and Disney would have to pay a premium on top of that, so saying they should sell Hulu and use that money to buy Netflix is like saying I should sell my Toyota Corolla and use that money to buy a Porsche.

Honestly, the ideal time for Disney to exit Hulu was before Comcast launched Peacock. They could have (should have?) sold Hulu to Comcast to use as the genesis of their service instead.

I'm skeptical Disney could get $18B for their two thirds of Hulu now. Is Hulu, which largely exists only in one market, worth a third of Netflix? With 220M subscribers around the globe? I don't see it, even with Netflix's current valuation troubles.

That said, I think in the long term its pretty much inevitable that Disney either sells Hulu (some tech giant or media conglomerate that missed the boat on streaming will eventually wake up and want it) or just merges it into Disney+. It just doesn't really make a lot of sense as a standalone service. Like, what is Hulu? That's a question that Disney doesn't really have a good answer for, right now.
 

blondkayvon

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Netflix's current (depressed) market cap is about $75B, and Disney would have to pay a premium on top of that, so saying they should sell Hulu and use that money to buy Netflix is like saying I should sell my Toyota Corolla and use that money to buy a Porsche.

Honestly, the ideal time for Disney to exit Hulu was before Comcast launched Peacock. They could have (should have?) sold Hulu to Comcast to use as the genesis of their service instead.

I'm skeptical Disney could get $18B for their two thirds of Hulu now. Is Hulu, which largely exists only in one market, worth a third of Netflix? With 220M subscribers around the globe? I don't see it, even with Netflix's current valuation troubles.

That said, I think in the long term its pretty much inevitable that Disney either sells Hulu (some tech giant or media conglomerate that missed the boat on streaming will eventually wake up and want it) or just merges it into Disney+. It just doesn't really make a lot of sense as a standalone service. Like, what is Hulu? That's a question that Disney doesn't really have a good answer for, right now.
Hulu offers next-day streaming for network TV, which I think is still valuable and unique and I would hate to lose it. Although the shows I care about will likely leave once Comcast is out so maybe it doesn’t matter anymore.

Anyway, this analyst has no idea what they’re talking about. 🙃
 

neil

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I don't know a lot about Roblox. But I have the impression that if Roblox went to Disney. then Disney would need to end players' use of unlicensed IP. And that would instantly kill the platform.
 

Vanillalite

Shriekbat
Hulu offers next-day streaming for network TV, which I think is still valuable and unique and I would hate to lose it. Although the shows I care about will likely leave once Comcast is out so maybe it doesn’t matter anymore.

Anyway, this analyst has no idea what they’re talking about. 🙃
That’s the rub. Eventually it’s just gonna be Disney cause everyone is pulling out. At that point what IS Hulu other than just a separate competitor to a service they already own.
 

JoshuaJSlone

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That’s the rub. Eventually it’s just gonna be Disney cause everyone is pulling out. At that point what IS Hulu other than just a separate competitor to a service they already own.
On the one hand, yeah, as a consumer I've wished they were just one thing for the last couple years. But corporations already have content split across countless separate channels on linear TV, so I can't completely say having two streaming service fees is much more crazy.
 


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