Is the Disney+ and Hulu Bundle the Ultimate Churn Solution or Too Much of a Good Thing?

The merging of Disney+ and Hulu in the US has been a topic of discussion within the industry, sparking both skepticism and optimism as earnings season approaches. The question arises: do bundled services or single-app super services create more value for consumers? The answer may vary depending on the perspective.

One interesting aspect of the consolidation of Disney+ and Hulu is the synergy between their content libraries in terms of age. Analysis of the US catalogs from Q3 2023 to Q2 2024 reveals that 76% of Disney+’s content is at least five years old, while Hulu’s library stands at 63%, according to Parrot Analytics’ Content Panorama. Notably, only 12% of Disney+’s content is between one and three years old, compared to 20% for Hulu.

In essence, Hulu leans towards more recent programming, while Disney+ boasts a collection of older, iconic titles alongside its blockbuster franchise originals. The top 10 most in-demand titles on Disney+ in the US this year range from a 2019 release to classics dating back to 1989, such as “The Simpsons.”

Hulu, on the other hand, serves as a hub for next-day airings of linear series, including popular ongoing shows like “Law & Order: SVU,” “Family Guy,” and “Grey’s Anatomy,” as well as recently concluded series like “The Resident” and “Bob’s Burgers.” Additionally, Hulu’s original content, such as “The Bear,” “Shogun,” “Under The Bridge,” and “The Handmaid’s Tale,” contributes to its more recent engagement spikes.

Disney+ primarily focuses on its flagship offerings, featuring legacy movies and Marvel/Star Wars originals that draw significant attention. The platform’s original series often target a younger male demographic. In contrast, Hulu’s emphasis on popular linear programming and international content attracts an older, predominantly female audience, setting it apart from Disney+.

The consolidation of the two services creates a diverse library catering to a wide range of consumers compared to their individual programming strategies. This consolidation is expected to enhance on-platform retention and consumption rates, potentially increasing the lifetime value of each subscriber. Notably, the Disney Bundle, which includes Disney+, Hulu, and ESPN+, has already demonstrated lower churn rates than each service individually.

However, the effectiveness of a single-service app in acquiring new customers remains uncertain. Similar strategies in the market, such as Paramount+ with Showtime and Max, have yielded mixed results. The success of this approach hinges on overcoming potential challenges like franchise fatigue and audience divisiveness surrounding Disney’s key properties, as well as the variable commercial performance of Hulu’s original content. Only time will tell how this consolidation will impact customer acquisition and retention in the long term.