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NBCU early next year has the option to exit a licensing agreement with Disney, the majority owner of Hulu. The Disney-owned streamer could lose shows like “The Voice” and “Saturday Night Live” by fall 2022 if NBCU decides to walk, but some older NBCU-produced shows on Hulu like wouldn’t be affected by the talks, according to WSJ.
But Hulu will have a lot of content produced by other companies to entertain subs with even if NBCU does decide to start pulling back its notable shows. Research firm Ampere Analysis estimated that as of October 2021, NBCU was the parent distributor of 9% of the distinct titles available in Hulu’s catalog.
It’s important to take note of the distributors, rather than the production companies, of Hulu’s titles for this analysis. That’s because there are instances where the producer of a title doesn’t ultimately end up distributing it or owning the rights to it. For example, the primary production company of Hulu original “The Handmaid's Tale” is MGM, but the parent distributor of the title is Disney because it owns the distribution rights for the show in the U.S.
NBCU's contribution to Hulu's title count is slightly less than that of ViacomCBS (11%) and significantly less than that of Disney (24%), per Ampere. It’s understandable Disney would contribute so much to Hulu given the company has had a majority stake in the streamer since 2019 — when Disney completed its blockbuster acquisition of Fox.
Of course, looking at Hulu’s catalog breakdown by distributor alone could be misleading, as it’s possible that a small percentage of video streamer’s content accounts for a significant portion of time spent on its service.
But the WSJ claimed that NBCU content accounts for a small total percentage of Hulu’s overall viewership in its original report of the Disney-NBCU talks.
Lining up with this claim is Ampere’s data, which suggests that Hulu isn't overly-reliant on NBCU for its buzziest titles. Ampere analyzed various content rating databases (including IMDb, Rotten Tomatoes and Metacritic) and estimated which 500 titles (either TV shows or films) on Hulu in October 2021 were the most positively reviewed by users and critics.
To estimate which 500 titles were the most positively reviewed, Ampere assigned each analyzed title a proprietary metric that took into account the number of and scores from reviews that a title had received across various databases. Reviews coming from more-established data sources received more weight.
8% of the 500 titles that Ampere determined to be the most positively reviewed on Hulu in October counted NBCU as the parent distributor, lower than the percentages of ViacomCBS (11%) and Disney (24%).
It may seem like a no-brainer for NBCU to take some of its signature shows back for Peacock, which is in need of a boost — Comcast didn’t provide an updated Peacock sign-up figure in its Q3 earnings after consistently doing so in previous quarters, suggesting engagement on the service had recently stalled.
But it’s not that simple because Comcast has a financial interest in Hulu performing well. Comcast owns one-third of Hulu and can enforce an option to sell its stake to Disney as early as 2024.
Because of this, NBCU may settle on somewhere in between taking much its marquee content away from Hulu and doing nothing. NBCU could negotiate for an agreement with Disney where episodes of its “The Voice” and “SNL” hit Hulu one week after they air on NBC, rather than the current typical one-day lag.
The Comcast-Disney negotiations reported by WSJ highlight how important it is for an SVOD not to get too reliant on one entertainment company as a content supplier as late video-streaming market entrants mature.
It also signals how prescient Disney was when it in April struck a multiyear deal, likely worth hundreds of millions of dollars, with Sony to bring theatrical films to Disney+ starting in 2022.
As part of that deal, a significant number of titles from Sony’s library were anticipated to hit Hulu as early as June of this year. That helps explain why Ampere estimated that Sony accounted for 7% of Hulu’s most positively reviewed content as of October 2021.