3 Reasons Hulu is Helping Disney

Hulu is going to be owned by Disney soon. Good news for Disney, if they're okay with losing $1 billion. Yet, Hulu is actually helping them. Here's how...

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Hulu, one of the big three streaming services, is going to be owned by Disney soon. Well, 60% of it will be owned by Disney. And this will happen after Disney completes its purchase of Fox Entertainments assets. Good news for Disney. Except when Hulu costs them about 1.3 to 1.6 billion in losses. Yet, this isn’t a bad thing. Maybe not at first. Disney, like any company, wants to make money on its assets and not have those assets lose them money. Especially when that amount starts with a ‘b.’ The positive here is that Disney is going to be enjoying the returns on Hulu’s efforts. Sure, in the short term, Disney is going to lose some money. Some. It’s a big amount, no doubt about it. I’ve never owned $1 billion. I doubt I will ever be worth that much in my lifetime. Disney, on the other hand, is dealing in multiple assets and properties across the globe. A billion here, a billion there is an acceptable loss for them. At least, it is from my perspective. They’ll most likely earn that $1 billion back in a month from all the merchandise they sell. What’s really happening here is a training or an upgrade montage.

The Upgrade Montage

https://www.youtube.com/watch?v=oBGGEZSAfyY Nearly every action movie has a training or an upgrade montage. Sometimes both. This montage is a series of clips of the hero, or team of heroes (as in the case of the Big Hero 6 clip above), get some new trinket, ability, or skill. Then they figure out how to use it and use it well. If Big Hero 6 isn’t your type of movie, then check out others on the streaming service of your choice. Or on cable. But first, save yourself some time and money by checking out the best internet deals and packages. Now go watch an action movie right up to when the hero gets the upgrade. Then stop. It’s not enough to get the upgrade, the hero(es) in question must use it and in the right way. Time is at a premium when it comes to movies, however. Audiences are not going to sit and watch hours upon hours of training, mistakes, learning, mistakes, frustration, mistakes, more frustration, learning, mistakes, and on and on. That’s real life. People who are training themselves want a break from the monotony of training. They don’t want to watch it in a movie. To get around this issue, producers put all that training and upgrading into a quick montage. Little scenes with quick action, one-liners, some slapstick comedy, and then show the little wins. Once the little wins are established, they show bigger and bigger wins. By the end of the montage, the hero(es) are proficient in said new skill/ability/talent/technology. A big part of the training montage is the song. Sometimes it’s an instrumental piece, written to highlight the difficulty of the training and/or upgrading. As the montage progresses the keys change to a higher key, signaling an emotional uplift. This comes right as there’s a small win. The music then builds as there are bigger and bigger wins. Once the hero(es) manage to reach a predetermined level of aptitude, the music crescendos, and the montage is over. Case in point; Fallout Boy’s “Immortals” is edited down to fit the montage for Big Hero 6. The key changes are kept in to signify when there’s a small win, and on and on until all six members of Big Hero 6 reach the appropriate level of aptitude. Fallout Boy was a good choice for the film, playing to the younger audiences and the hip feel of the movie. If they went with a different band or sound, it would have taken away from the overall feel of the movie. In real life, unfortunately, there are no training montages. It’s a day-in, day-out grind to train and keep training. As people work towards a goal, there’s no background music. If there was an option to have a full orchestra playing while I worked, I think I would take it. Nothing like hearing music firsthand to really stoke the creative fires. For Hulu, they’re in the middle of their training montage. There’s no music, no short clips. But we are past the hard part.

Small Win

The Handmaid’s Tale won Golden Globes and Emmy’s this year, making it Hulu’s first original content to take home such honors. To capitalize on this, Hulu has begun to put money and effort into more and more original content. Endeavors such as these take time and money to pull off. About $1.3 to 1.6 billion in money to be exact. But it’s not a bad thing for Disney.

Long-Term Gains Over Short-Term Revenue Goals

Any new endeavor takes time. The Handmaid’s Tale is a signifier that Hulu is onto something that works. It may not be perfect, but it’s successful. And successful is better than perfect. What the drama has done is show Hulu what to do, how to do it, and where to improve the formula. Sure, Disney has their revenue goals, as all companies do. But to enjoy bigger revenues in the future, maybe taking a $1 billion loss will be worth it? From the lowly perspective of a content manager, that makes sense. Of course, we’re talking about large sums of money in the abstract. I can’t begin to understand how the accountants involved in dealing with the real money feel right now.

Better Strategy

Making money for the sake of making money is a bad strategy. I’ve taken jobs before simply for the money. Sometimes it was because I had to. There were bills to pay and children to feed. So I took a job I hated because it meant my children wouldn’t starve. Then there were the jobs that I took because I thought “Hey, more money, should be fun, right?” But I was wrong. So, very, wrong. This “more money” type of job came with a boss who had unrealistic expectations of me, not to mention he wasn’t completely honest with the requirements of the job. It also didn’t help that other people within the company were incompetent and that just made more work for me too. But I’d be making more money, right? That didn’t matter. After all the time I spent on the job, I barely had time, or energy, to enjoy the fruits of my labor. So I quit. Hulu is doing it differently. They’re focusing on what works and improving that than just focusing on what makes money. This comes back around for them. By focusing on what works, they will be making more money. And more efficiently too.

Calculated Risk

Everybody must take risks in life. Otherwise, life would be very boring. Companies must take risks too. Yet, companies need to be wise in the risks that they are taking. For now, Hulu is risking billions of dollars in losses for Disney to fill out it’s stable of original programming. They aren’t doing this recklessly though. As stated before, they know what works and they’re using that as a guide for further endeavors.

Montage Ends

Hulu has their small wins and as they continue to duplicate them, there’ll be more mistakes. It’s easy to say, “mistakes will happen, learn from them.” But for those who make mistakes, and must pick up the pieces afterward, it’s not so easy. Mistakes can be demoralizing. Learning from them isn’t always fun either. Hulu is doing just that, making their mistakes, picking themselves up, learning from them, and trying again. Maybe when it’s all over they can make their own movie about it and have their own upgrade montage to show the process. Should be interesting.