Disney’s latest deal is indicative of the evolving roles of streaming services, content and advertising within the media and entertainment industry.

In the latest Disney-led deal, the entertainment industry juggernaut will acquire Comcast’s 33% stake in Hulu. Disney is already Hulu’s majority owner, and has been since acquiring assets from Fox in March. Comcast relinquished its voting rights effectively immediately, but the sale will not take place for another five years. Hulu’s valuation is likely to fluctuate in this time, but it is currently $27.5 billion, a jump from last month’s $15.8 billion. Disney will pay at least $5.8 billion.

In the meantime Comcast, which owns NBCUniversal, will continue to license its NBC content to Hulu for the next five years. It has the option to pull its content after three years, however, which could be crucial to the future of Hulu. The streaming service built its audience on shows from NBC, ABC and Fox. Disney owns ABC as well as Fox.

Stephen B. Burke, Chief Executive of NBCUniversal, said the content licensing agreement between Comcast and Disney “will generate significant cash flow for us, while giving us maximum flexibility to program and distribute to our own direct-to-consumer platform.” NBC will join the video streaming industry next year when it launches its own streaming service.

Hulu had 28 million subscribers at the end of April, up 12% from the end of last year. It is expected to lose more than $1.5 billion this year, but Disney Chief Executive Robert Iger said he expects Hulu to have 40 million subscribers and turn a profit by 2024. “Hulu represents the best of television, with its incredible array of award-winning original content,” Iger said. Disney plans to integrate the service into its business operations, the New York Times reports, and will probably fold Hulu’s staff into Disney’s streaming and international division, led by Chairman Kevin Mayer.

Hulu’s products include a live TV service similar to cable, an ad-free streaming service, and a much cheaper streaming service with commercials. The latter is its most lucrative business. It is also something which distinguishes Hulu from its main rival in the video streaming industry, Netflix, and Disney Plus, which is expected to launch in December. Like Netflix, Disney Plus will be commercial-free.

Advertising is integral to Hulu’s business model. First, it brings in a growing stream of revenue, totalling more than $1.5 billion last year, up 45% from the previous year. Hulu also uses advertising as a platform for innovation. “This uniquely positions Hulu to benefit from leading brands into the digital video ad market,” said Chief Executive Randy Freer, commenting on the Disney deal. “Hulu does this with a viewer-first ad experience that has less commercial interruption, with ad breaks that are shorter and ads that are more relevant.” Freer expects the ad market for online television to grow to $50 billion in the next three years.

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