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Now Streaming on Hulu: Red Ink
Monday, February 11, 2019

Comcast Corp. ($CMCSA) filed its 2018 annual report at the end of January, which gives us fresh opportunity to catch up on one of our pet interests: the value of Hulu.

We write about Hulu from time to time because it’s a huge player in streaming media, but isn’t publicly traded — so its financial data is somewhat hard to find. Then again, Hulu is owned by four entertainment giants: Comcast, Disney, and Fox, which own 30 percent each; plus Time-Warner with a 10 percent stake.

So if you know where to look in the filings of those companies, you can assemble a better, although still incomplete, picture of Hulu’s performance over the years.

The best place to look these days is the Comcast filing. There in the Investments section of its disclosures, Comcast reports that it owns a 30 percent stake in Hulu and recorded a $454 million loss in 2018 for its share of Hulu operations.

Well, do the math. If 30 percent ownership gives you a $454 million loss, that implies that Hulu’s total loss for 2018 was (gulp) $1.5 billion.

Yikes, we wondered, could that be right? So we pulled up Fox’s most recent annual report, which it filed last August. (Fox has a June 30 fiscal year-end.) There in the Investments section of Fox’s disclosures, it reported a loss of $445 million for its 30 percent ownership stake.

So, yes. Hulu loses a ton of money. We knew that already, based on previous posts we’ve written about Hulu. Still, for historical perspective, using those same calculations from prior years’ disclosures, Hulu’s losses have been…

  • 2014: $20 million;
  • 2016: $523 million;
  • 2017: $716 million.

Wow. And why, exactly, are those losses ballooning so much? Consider this disclosure from Disney’s most recent annual report, filed last November:

The higher loss at Hulu was due to higher programming, marketing and labor costs, partially offset by growth in subscription and advertising revenue

In fairness, Disney and Hulu’s other owners have been disclosing that sentence for three years running now.

One other detail one can pull from the disclosures: a rough estimate of what Hulu might be worth as a business. Hulu was originally founded by Disney, Fox, and Comcast alone, each owning 33 percent of the venture. Time Warner then bought 10 percent of Hulu in August 2016 for $590 million. That implies a value of $5.9 billion at the time.

So what is Hulu worth today? That’s hard to say. First, Fox is selling its 30 percent stake to Disney as part of larger asset purchase deal. That means Disney will become Hulu’s majority owner with a 60 percent stake in the business. We’re still waiting on that deal to close sometime later this spring, and maybe we’ll get a better sense of the purchase price for this particular asset then.

Meanwhile, one of Hulu’s top executives said just this week that the business had double-digit subscriber growth in 2018 (growing fastest in the United States), and now has 25 million paying subscribers. The Hulu exec was upbeat about Disney owning a majority stake.

Then again, what else would you say when you’re a senior exec trying to keep your job?


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