The money-losing Hulu streaming service has been hampered for years by divided ownership and missed opportunities, while Netflix became a big brand, launched popular originals, and went global with more than 100 million subscribers.
Now, two giant media companies that deeply dislike each other and engaged this year in global bidding wars for entertainment properties — Comcast Corp. and the Walt Disney Co. — will determine Hulu's fate.
"Comcast and Disney don't always see eye to eye or get along real well," Hal Vogel, a Hollywood industry observer and author, said Friday. "It's a miracle [Hulu] has survived this long."
Disney is consolidating 60 percent ownership control of Hulu through its deal to acquire the entertainment assets of 21st Century Fox, securing six Hulu board seats. However, the Disney-Fox deal needs final government approval.
At the same time, Comcast — which owns 30 percent of Hulu — put three high-powered executives on Hulu's board last month for the first time since 2011 after conditions of its deal for NBCUniversal expired.
The Justice Department antitrust attorneys forced Comcast to agree to leave the management of Hulu alone for seven years, fearing the Philadelphia cable company would harm Hulu's business in order to protect its high-margin cable-TV franchises. The federal conditions expired in September.
Hulu CEO Randy Freer also has a seat on the company's board. AT&T owns 10 percent of Hulu though its acquisition of Time Warner Inc. but does not have a board seat.
Both Comcast and Disney face threats to their legacy cable and TV businesses in this era of streamers such as Amazon Prime, Netflix, and smaller competitors that include Hulu.
Vogel thinks the best thing for Disney to do would be to sell Hulu, which has 20 million streaming subscribers and has produced some popular original shows, such as The Handmaid's Tale, but is losing about $1.5 billion a year, according to published reports. Hulu offers an ad-supported service for $8 a month, an ad-free service for $12, and streamed live TV for $40.
But analysts Lauren Martin of Needham & Co. and Michael Pachter of Wedbush Securities believe that Disney and Comcast will get along because they need to make Hulu a stronger competitor against Netflix.
"This is make or break for Hulu," said Pachter. "Obviously there's a lot going on. … The threat from Netflix has to be neutralized, and the way to do that is to make Hulu viable."
The idea, Pachter said, is to make Hulu rich with entertainment options that can't be matched by Netflix.
The three Comcast executives who joined the Hulu board in September are part of its NBCUniversal entertainment subsidiary: Jeff Shell, chairman of the Universal Filmed Entertainment Group; Linda Yaccarino, chairman of NBCU's advertising and client partnerships; and Matt Bond, chairman of NBCU content distribution.
"We appointed three of our top executives with strong expertise across content, distribution, and advertising. They are all highly qualified, and we believe they are valuable additions to the Hulu board," Comcast said in a statement on Friday.
Three other board members each are currently apportioned to Fox and Disney, though Disney will control all six if the U.S. government approves its deal for the Fox entertainment assets, which includes the Fox movie studio, cable channels, regional sports networks, and international channels. The $71 billion Disney/Fox transaction still needs final government regulatory approvals.
While Disney won many of the Fox assets, Comcast pried the Sky television service out of the hands of Disney and Fox for $40 billion in a United Kingdom auction.
Adding to the uncertainty at Hulu is the Justice Department's continued concern over Comcast management interference despite the expiration of NBCU conditions.
Assistant Attorney General Markhan Delrahim told a Senate subcommittee on Wednesday that the department will examine whether the U.S. cable company will take any action that would harm Hulu's competitiveness, according to Bloomberg and Deadline.