Disney is using FX to ensure people don’t forget about Hulu

Technology

With Disney+ just five days out from launching, it’s easy to assume that Disney executives would want to talk to investors during its fourth quarter earnings call about the anticipated streaming service. Instead, Disney CEO Bob Iger spent a large portion of time talking about another major streaming service the company owns — Hulu.

Hulu now has more than 28.5 million subscribers, but its lack of original programming compared to Netflix and bigger libraries from incoming competitors like HBO Max and Peacock could make Hulu feel unnecessary for subscribers. Now that Disney owns Fox, FX could change that.

Hulu is set to become the premiere streaming home for FX titles beginning in March 2020, Iger announced during a call with investors. FX is one of the most prestigious networks, often considered in the same vein as HBO. Known for absurdist comedies and groundbreaking dramas, FX has won 57 Emmys since 2014 and won more Golden Globes than HBO, Netflix and Amazon Prime in that same time for shows like American Crime Story, Pose, Fargo, and The Americans. Having FX content exclusively on Hulu immediately gives the streaming service a level of prestige.

As part of the arrangement, four upcoming FX series, including Alex Garland’s (Ex Machina) new show Devs, won’t air on FX at all, but exist as Hulu exclusives. “FX on Hulu,” as it’s being referred to, also means most current and all-new FX series will be available to watch on Hulu immediately following the show’s airing.

FX becoming a prominent fixture on Hulu isn’t too surprising. Iger has touted the partnership between Hulu and FX on previous earnings calls, but having some of its series siphoned off to Hulu would be a major shift for the linear channel. John Landgraf, the visionary head of FX, has repeatedly spoken about the potentially damaging effects of streaming services and companies like Netflix while acknowledging this is where the industry is headed. Recently, he defended parent company Disney’s decision to not run Netflix ads on its entertainment networks (like ABC), explaining that he would “prefer not to share a scarce resource in an environment where we’re fighting for our lives.”

Now that Hulu and FX are about to become interconnected partners, Landgraf reiterated that what made FX special — the quality of its shows — wouldn’t change. “We are more committed than ever to quality over quantity, with our primary focus on excellence that can cut through the clutter at a time of unprecedented consumer choice,” Landgraf said in a press release.

Audiences are going to notice one change from FX though, regardless of where they watch it: there will be more. Landgraf told reporters in August following a Disney investors call that FX will increase its output to a level the network’s never seen. As we’re seeing with HBO, scale is important when it comes to streaming, and having a constant slate of new shows is a strategy many companies are betting on. Unlike companies like Netflix, which Landgraf has criticized in the past, FX won’t “move fast and break things” in order to keep up.

“Making as much programming as we can, as fast as we can, has never worked for FX,” Landgraf said.

Finding the balance between having good shows and movies, and boasting a constant stream of new content is what streaming services like Netflix have struggled to fix. Disney is looking to leverage Fox’s most popular and beloved networks and studios — not just FX, but also Fox Searchlight — to satisfy both requests. Iger suggested that once Fox Searchlight’s output deal with HBO (owned by WarnerMedia, which is owned by AT&T) comes to an end, that studio will make exclusive content for Hulu as well. It’s likely that Fox Searchlight will make films for theatrical consumption too, but others will become streaming exclusives not unlike the four FX shows.

Licensing deals are complicated. It’s why certain FX titles, like Pose and American Crime Story, won’t be available on Hulu right away. Iger remarked upon such on the call, but he wants to bring as much exclusive content from powerhouse studios to Hulu. 20th Century Fox also has a deal with HBO, but once that ends, it’s likely that Fox films will go exclusively to Hulu, too. Disney is already doing this with its own movies. For example, its live-action version of The Lady and the Tramp was supposed to be a theatrical release, but ended up an exclusive Disney+ launch title.

If people are going to the theater to watch movies and blockbusters from specific franchises — Marvel, Star Wars, DC, Pixar, Avatar, etc — Hulu can become a place to funnel riskier bets that may not perform as well at the box office. Iger told investors that Disney executives aren’t looking at the streaming services as “entities unto themselves, but rather a wider monetization play.” Streaming is just one avenue for exclusive content, offset by theatrical releases and live television.

Having movies from Fox Searchlight and FX originals on Hulu is important to Iger. He told investors that while the streaming sphere is getting extra competitive, people are still drawn to brands they recognize. FX and Fox Searchlight are prestigious names, and will ideally boast Hulu’s identity. “FX will become a key driving factor for Hulu,” Iger said.

It’s especially important in light of general entertainment streaming services such as HBO Max (not to be confused with HBO Now) and Peacock launching in the coming months. These streaming services, which Hulu arguably belongs to, have less of an identity than a platform like Disney+ or Crunchyroll, and rely on a large swath of shows and movies that appeal to a broad subscriber base.

What’s clear from Disney’s most recent earnings call is that despite all the attention Disney+ is getting ahead of its launch, Hulu still matters, and importantly, Disney wants to keep Hulu worthy of your monthly subscription budget. It may have felt like Disney forgot about Hulu while prepping Disney+’s launch, but it’s clear from today’s call that’s far from the case.

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