In a significant development, Disney has unveiled its plans to consolidate Hulu and Disney Plus into a single, integrated streaming app. The announcement came during Disney’s Q2 earnings call, where CEO Bob Iger discussed the company’s vision of creating a “one-app experience” within the United States. As part of this initiative, Disney will raise the price of its ad-free plan, currently priced at $10.99 per month.

Iger emphasized that while Disney will continue to offer Disney Plus, Hulu, and ESPN Plus as standalone options, the merger represents a logical progression of their direct-to-consumer (DTC) offerings. By combining these platforms, advertisers will gain greater opportunities, while subscribers to bundled packages will enjoy access to a more comprehensive and streamlined content library. This strategy aims to enhance audience engagement and deliver a more unified streaming experience.

While Disney’s streaming business posted a loss of $659 million in Q2, lower than expectations, the company did witness a decline of 4 million subscribers globally compared to the previous quarter, resulting in a total of 157.8 million subscribers. This dip in numbers may be indicative of the potential impact of recent price increases on the subscriber base.

Details regarding the extent of the price hike for the ad-free plan and the possible impact on pricing once the single app is launched remain unknown. It’s worth noting that Disney had increased prices for both Hulu and Disney Plus last year, introducing a $7.99 per month ad-supported tier. Chief Financial Officer Christine McCarthy confirmed that this ad-supported tier will be introduced in Europe by the end of this year.

Iger revealed that the combined app is set to roll out by the end of the calendar year, with additional specifics to be shared in due course. It’s important to highlight that Disney has already integrated Hulu content into the Disney Plus app in select countries outside the US. This move from Disney follows closely on the heels of Warner Bros. Discovery’s announcement of bundling HBO Max and Discovery Plus into a single app named Max, scheduled for launch later this month.

Currently, Disney is contemplating the acquisition of Comcast’s 33 percent stake in Hulu, as per the agreement reached in January 2024. The agreement stipulates a minimum valuation of $27 billion for Hulu, rendering Comcast’s stake worth at least $9 billion. However, in light of the uncertain economic climate, Disney may exercise caution before committing to the purchase.

Iger acknowledged that the final outcome rests partly in the hands of Comcast and hinges on ongoing negotiations. He emphasized the value of combining general entertainment with Disney Plus, asserting that Hulu represents the ideal solution to achieve this synergy.

Additionally, Disney disclosed its plans to remove certain content from its streaming services. Disney CFO Christine McCarthy explained that this content review is part of the company’s strategic changes in content curation, resulting in an estimated impairment charge ranging from $1.5 to $1.8 billion.

In summary, Disney’s decision to merge Hulu and Disney Plus into a unified streaming app marks a significant move in the streaming industry. With a price hike on the horizon and the promise of a more cohesive user experience, Disney aims to leverage this consolidation to drive increased engagement and subscriber satisfaction. As the launch date approaches, more information will be unveiled, providing a clearer picture of Disney’s streaming future.