Questions Remain for Disney Plus, Hulu Amid Iger-Chapek CEO Transition

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In a surprise announcement, Bob Iger said he was stepping down as Disney’s chief exec citing “the successful launch of Disney’s direct-to-consumer businesses” as one reason for the timing as he hands off to new CEO Bob Chapek.

True, Disney earlier this month reported tremendous growth for Disney Plus, racking up 28.6 million users just three months out of the gate, as well as gains at Hulu (which it now controls) and ESPN Plus. The company’s Direct-to-Consumer & International division is headed by Kevin Mayer, who had been seen by many as a possible successor to Iger in the CEO seat. Disney created DTCI in 2018 as part of a reorg in creating a dedicated home for its streaming initiatives.

Yet there are signs that Disney’s streaming businesses are still very much a work in progress, with key questions of how all the pieces will fit together — or not — moving forward.

For starters, Mayer just installed a new boss at Hulu: Kelly Campbell, formerly chief marketing officer, will take the reins after Randy Freer’s recent exit as CEO. That news was announced Tuesday, just hours before Disney disclosed Iger’s retirement.

In announcing Campbell’s promotion to the post of Hulu president, Disney said she will “work closely with Disney’s television and film studios on Hulu’s original content, and with other DTCI leaders on the integration of key aspects of Hulu’s operations across the segment” — suggesting there may be big organizational changes coming to the Hulu business. Note that Disney TV Studios’ Dana Walden now oversees Hulu’s scripted originals, in a change made last summer.

Over at Disney Plus, there’s uncertainty about the direction of the service’s content strategy, which is overseen by Agnes Chu, senior VP of content for the streamer. Chu was formerly a story and franchise development executive at Walt Disney Imagineering as well as a close aide to Iger.

Disney Plus scored a big early victory with the Star Wars-set series “The Mandalorian,” as well as docuseries fare such as “The Imagineering Story.” But it has not all been smooth sailing. After it was announced that a “Lizzie McGuire” revival was in the works at Disney Plus, Variety exclusively reported that original series creator and revival showrunner Terri Minsky had been let go from the show over creative differences with Disney. Likewise, the writer of the planned Obi-Wan Kenobi limited series, Hossein Amini, departed that project after Disney decided to overhaul the scripts.

There also are questions about how Disney will divvy up content among its OTT services — specifically, what kind of content will be deemed “too adult” for Disney Plus and shuttled over to Hulu. On two separate occasions now, projects set up at Disney Plus were shifted to Hulu after it was decided they were not family-friendly enough for the streamer – the “High Fidelity” series starring Zoe Kravitz and the “Love, Simon” series, which is now titled “Love, Victor.”

Currently, Disney Plus has virtually no projects either on the air or in the works that hail from outside studios. One exception is the recently launched live-action comedy series “Diary of a Future President,” which is produced by CBS Television Studios. Nearly all of the streamer’s other projects are produced by one of the studios under the Disney umbrella, with a significant number of those based on existing IP from those studios’ libraries. Recent examples include the “Turner & Hooch” series in the works for Disney Plus from 20th Century Fox Television, the multiple Marvel Cinematic Universe limited series, and the “Mighty Ducks” series from ABC Signature Studios.

Some Wall Street analysts believe the Disney Plus’s huge subscriber liftoff in Q4, fueled in the U.S. in part by the one-year-free deal with Verizon, were exceptionally strong results that won’t be replicated.

“[T]here will probably never be another year where Disney+ (or, in fact, the entire suite of Disney OTT services) adds as many subs as it did in the first year (or, frankly, in its first quarter),” Sanford Bernstein analyst Todd Juenger wrote in a Feb. 21 research note. That said, the analyst forecast that Disney Plus is on target to reach 40 million users in the first year — well over Wall Street’s previous estimates in the 10 million range.

Meanwhile, on the technical side, Disney’s direct-to-consumer operations remain headed by Michael Paull, president of Disney Streaming Services. That’s the group that is responsible for the design and delivery of OTT services including Disney Plus and ESPN Plus.

DSS also powers the live streaming TV for Hulu, and longer term, Disney’s plan under the DTCI organization is to consolidate all Hulu streaming and product duties under Paull’s New York-based group (although insiders say no concrete decisions have been made yet to do that). That could mean more executive changes are coming to Hulu, whose technical and product strategy is led by CTO Dan Phillips, former COO of TiVo who joined the streamer in 2018.