FX to Produce Original Series for Hulu as Brands Become More Closely Intertwined

FX Networks is poised to produce original series for Hulu as the two brands become more closely intertwined now that Disney has taken full ownership of Hulu.

Disney chief Bob Iger said Thursday that Hulu will become the streaming home of FX channels, showcasing the cable group’s library and current series under the “FX on Hulu” banner to launch in March. Episodes of current FX series will be available on Hulu immediately after linear premiere, Iger said.

Moreover, FX will produce four original series for Hulu next year: Dramas “Devs,” “Mrs. America,” “A Teacher” and “The Old Man.” Those shows had been in the works for linear FX but will now be exclusive to Hulu.

“Mrs. America” in particular is a high-profile property featuring Cate Blanchett as 1970s conservative firebrand Phyllis Schlafly. “Mrs. America” and tech thriller “Devs” will bow in the spring. “A Teacher,” starring Kata Mara, is set to premiere in the summer while “Old Man,” toplined by Jeff Bridges, is targeted for the fall.

FX has two new original comedies in the pipeline — “Dave,” starring rapper Lil Dickey, and “Breeders,” starring Martin Freeman — that will still premiere on the linear channel in the spring, with episodes landing on Hulu right after each linear airing.

FX will become “a key content driver for Hulu,” Iger said during Disney’s fiscal fourth quarter earnings call on Thursday. But Hulu will continue to have its separate programming and development operations for its dedicated slate of original series.

The FX library available on Hulu will be limited in the near time by existing streaming licensing pacts. Among the 17 vintage series available at the FX on Hulu launch will be “Sons of Anarchy,” “You’re the Worst,” “Baskets,” “The League,” Wilfred,” “Tyrant” and “Legion.”

Fox Searchlight is also preparing to produce original content for Hulu, Iger said. Fox Searchlight and its larger sibling 20th Century Fox have film output deals with HBO at present, but once those deals expire it’s likely that those deals will shift to Hulu, Iger said.

Also on the call, Iger confirmed that the much-anticipated Disney Plus service will launch in key European territories — the U.K., France, Germany, Italy and Spain — on March 31. Disney Plus bows in the U.S. on Tuesday.

Iger, not surprisingly, said he was “enthusiastic” about the consumer response to the promotion for Disney Plus so far although he would not offer any hints of pre-launch subscription activity. Disney Plus is offering a three-year subscription deal for $169.99, or $69.99 a year $6.99 per month.

“We feel good about the product that is going into the marketplace (next) week,” Iger said.

The magnitude of the investment in Disney Plus was underscored by Disney’s financial guidance for its fiscal first quarter ending Dec. 31. Christine McCarthy, Disney’s chief financial officer, said Disney’s Direct-to-Consumer and International business unit will generate about $800 million in operating losses for the quarter, given the investment in Disney Plus and the consolidation of Hulu results, now that Disney is the sole owner of the streaming platform that was once a joint venture of Disney, Fox and NBCUniversal.

Operating income for DTC/International unit is projected to take an $850 million hit from the comparable fiscal 2019 quarter, McCarthy said.

But Iger is taking the long view. As he has said for more than two years, hefty investments in content, marketing and infrastructure will pay off down the road as Disney positions itself for the future. After all of the M&A conducted during Iger’s 15 years as CEO — capped earlier this year by the $71.3 billion acquisition of 21st Century Fox — Disney has immense untapped potential as the TV industry evolves to a favor global streaming platforms.

“We have a very unique reach as a company right now — in some respects it is unrivaled,” Iger observed. With Disney Plus and Hulu in the tent, programs that are produced for ABC and other Disney-owned linear channels can now “move through a system that ultimately ends up on SVOD, or Hulu or Disney Plus. And that’s an extraordinary way to reach more consumers and monetize our investment in this product,” Iger said. “It’s a competitive advantage. The companies we’re competing with don’t have as many ways to monetize products or reach consumers.”

Among other news from the hourlong call:

** ESPN Plus, which bowed in April 2018, has hit 3.5 million subscribers. In February, Disney said the service had topped 2 million. UFC pay-per-view bouts have been big drivers for the service so far. This past weekend, a UFC fight generated “one of ESPN Plus’ largest live audiences to date,” Iger said.

** Amazon Fire has come on board as a distribution partner of Disney Plus. Samsung and LG will make the app available on its smart TV operating systems.

** Iger added more fuel to speculation that the NFL may be returning to ABC. Iger told analysts that viewers are “likely to see more sports on ABC as the value of live (programming) grows.” Iger emphasized Disney’s unique ability to make sports available on live linear networks in ESPN and ABC and via streaming through ESPN Plus.

(Pictured: FX’s “American Horror Story: 1984”)

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