An asset swap could help simplify the complicated and somewhat adversarial relationship between Disney and Comcast. Comcast may want out of Disney’s Hulu and Disney may dump its position in Sky acquired through Fox. Would the swap be good or bad for both companies?
Chapter 1: Comcast, Sky, Hulu, and Disney (1:00)
Disney bid successfully against Comcast for 21st Century Fox. It paid $71 billion for the company, and Fox’s 39% stake in Sky came along with the deal. It also acquired Fox’s 30% ownership in Hulu, giving it full control of the streaming service.
Comcast bid successfully against Disney for Sky. The $40 billion deal gives it the controlling share of Sky. Comcast also owns 30% of Hulu through its ownership of NBCU.
CNBC says that Comcast may be looking to swap its 30% share in Hulu for Disney’s 39% ownership of Sky. Will doesn’t think Comcast should do the swap. He thinks there is value in Comcast holding on to Hulu because it gives the company a “front-row seat” into how to run a successful online video business.
I’m not so sure it is worthwhile for Comcast to retain its share in Hulu. It can learn about the online video marketplace from its new acquisition, Sky satellite.
Chapter 2: Hulu must hang on to NBCU content (5:15)
Disney certainly will benefit from Hulu. However, NBCU content is essential to the service. One of the biggest selling points of Hulu to consumers is that most new television shows are available. If Hulu were to lose NBCU content, the streaming service would become much less valuable to subscribers.
Chapter 3: Comcast must focus on and learn from Sky (9:30)
Sky already has a direct-to-consumer online service, called Now TV. Through Now TV, Sky markets some of its satellite content under very different terms to consumers. For example, a viewer can buy access to the 10 Sky Sports channels for a day or week. The strategy has allowed Sky to grow overall customer relationships even as the content market has become much more competitive.
Chapter 4: Now TV streaming media player (16:00)
One of the interesting aspects of the Now TV service is that consumers can buy a white-labeled Roku box from Sky to get it. Sky controls what services are available on the box and has just added Netflix. The approach could be an interesting one for Comcast.