The Disney Duo App – Hulu and Disney+ combined – stacks up much more strongly against the competition than the two apps separately. But will it be a good deal for subscribers?
As part of Disney’s fiscal second-quarter earnings call, CEO Bob Iger revealed that the company plans to combine Hulu and Disney+ into a single app experience. The two are already available as a bundle of separate apps: the Disney Duo bundle goes for $9.99 a month with ads. In today’s podcast, we’ll look at the reasoning behind the combination and how it stacks up against the competition. But first…
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Disney’s plans for the Duo App (2:00)
Disney plans to have the Duo App available by the end of the year, and it will immediately be available to those that have subscribed to the Duo Bundle. People will still be able to subscribe to the separate apps if they wish, and the two flavors – including and without ads – of the Tri-bundle will also continue to be available. So, viewers will still be able to control what Disney content they pay for, as Mr. Iger promised a few years ago.
Oh, and I guess this finally puts to bed whether Disney will keep Hulu or sell it to Comcast. Combining them wouldn’t make much sense if the company doesn’t keep it.
Why Disney is making the move (3:00)
Disney says creating the Duo App will be good for subscribers because it combines the general entertainment content in Hulu with the premium content in Disney+. However, there are other reasons why it makes sense for Disney to combine the two services that have nothing to do with making subscribers happier.
Both Disney+ and Hulu have content flow problems. Hulu lost the most recent NBCU episodes last year as Comcast moved it to Peacock. The loss erodes a key value proposition for Hulu as the place to go to watch the latest top TV shows. To compensate, Disney needed to boost spending on content to bolster the value of the service to subscribers. However, it has done the opposite. To move Disney+ to profitability, it is cutting spending on content for all its direct-to-consumer services.
So, Disney+ and Hulu are suffering content deficits. And it is showing in the growth of both services. Disney+ lost subscribers in the US and Canada last quarter for the first time since launch. It was down by 1% to 46.3 million. Hulu’s growth has also slowed to a crawl. It gained just 0.5% to reach 43.7 million SVOD-only subscribers.
Combining the two services into the Duo App effectively hides the content loss in both apps. And the combination creates a monster.
Disney Duo App will be an entertainment monster (6:10)
The combination Duo App will be a monster second only to Netflix in the market in terms of the amount of content it provides.
My thanks to the streaming TV aggregator Reelgood for letting me know how much content is available in each service. And I’ll include graphs of this data in the posting of this podcast on the nScreenMedia website.
Separately, Hulu and Disney+ lag far behind competitors in the size of their US libraries and the quality of the titles available.
Looking at movies first, Netflix leads in available movies, with HBO Max, Paramount+, and Peacock Premium taking up the second, third, and fourth places. Looking at high-quality titles available, Disney+ does a little better, coming into third place, with HBO Max, Netflix, and Peacock Premium ahead. Hulu languishes in fifth place either by total or quality title count.
Hulu does better for TV shows. Looking at the total number of TV shows available, it is in third place, far behind Netflix and slightly behind Discovery+. The number of high-quality titles available places it in second place behind Netflix, and Disney+ is way behind all the other services in both total and quality TV titles available.
So, the Reelgood data shows that Hulu and Disney+ are pretty lackluster competitors among the top US SVODs.
Disney Duo App a stronger contender (9:00)
The Disney Duo App is a much stronger contender against the competition. Looking at movies first, it is third in terms of total titles and high-quality titles. Duo App is neck and neck with Netflix for total and high-quality titles TV shows.
However, we should be careful about this analysis. According to Disney CFO Christine McCarthy, the company is shifting to a more curated approach with its direct-to-consumer offerings:
“We are in the process of reviewing the content on our DTC services to align with the strategic changes in our approach to content curation that you’ve heard Bob [Iger] discuss. As a result, we will be removing certain content from our streaming platforms.”
So, we should expect content to thin some in the coming months. But it should still leave the Duo App as a serious contender in the US market.
Unanswered questions (10:30)
Hulu and Disney+ have very different ad loads. Disney+ shows 4 minutes or so per hour, and Hulu’s is double that. I doubt that Disney will lower the ad load on Hulu content, so does that mean Disney+ content will get more than double the ad load? If not, that will create a pretty jarring user experience between watching Hulu and Disney+ content.
Also, will the change come with a price increase? Mr. Iger said the company will increase the price of ad-free Disney+ this year. Will he also bump the price of the Duo App?
I’m looking forward to the company releasing more information about the Duo App and how it plans to handle the curation of the content in the coming months.
If you’d like a rough transcript of today’s podcast, head over to the nScreenMedia website. You’ll also find the diagrams of the Reelgood data, which should help you understand how the Duo App stands up against the competition a bit better. Post a comment about the podcast and whether you’ll be signing up for the Duo App while you’re there too. And why not sign up for the free newsletter?
