Hulu's Value Is Now $8.7 Billion, But Still Dwarfed by Netflix

(Bloomberg) -- The streaming service Hulu, which has gained clout thanks to shows like “The Handmaid’s Tale,” is now worth about $8.7 billion. But that remains a small fraction of Netflix Inc.’s value.

Walt Disney Co. laid out the valuation of Hulu as part of a filing Wednesday about its planned merger with 21st Century Fox Inc. Disney is buying most of Fox’s entertainment assets in a $52.4 billion all-stock deal, which would include taking control of Hulu.

Gauging the worth of the streaming service has been a fixation of the entertainment industry, especially as Netflix’s market capitalization has climbed into the stratosphere. Time Warner Inc. bought a 10 percent stake in Hulu for $583 million in 2016, pegging the business at less than $6 billion.

But if Hulu were valued in the same manner as Netflix, it would carry a much higher price, according to Bloomberg Intelligence. If Hulu had Netflix’s multiple of $1,217 per subscriber, it would be worth $20.7 billion, analysts Geetha Ranganathan and Paul Sweeney said in a report last month. But given Hulu’s limited prospects in overseas markets, that number is probably unrealistic, they said.

Disney says its current 30 percent stake in Hulu is worth $2.3 billion. Besides Time Warner’s 10 percent stake, Fox and Comcast Corp. each own 30 percent apiece. If the Fox deal goes through, Burbank, California-based Disney will end up with 60 percent -- a controlling stake that merits an additional $1.1 billion in value, according to the filing.

Netflix, meanwhile, remains the world’s largest paid online TV network. After reporting record first-quarter subscriber growth and a 40 percent jump in sales, its market value surpassed $145 billion -- bringing it within $7 billion of Disney itself.

©2018 Bloomberg L.P.

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