6:25am PT by Lesley Goldberg
Disney's 'FX on Hulu' Plan Snubs Pay TV in Battle to Boost Digital
When WarnerMedia CEO John Stankey unveiled HBO Max on Oct. 29, he also created, in his words, an "IQ test" for consumers. For $15 a month, cable subscribers can get HBO, or, in May, access to HBO Max, the beefed-up streamer that will be home to shows from the premium cable network and a plethora of originals and library content from across the WarnerMedia brands.
Days later, Disney CEO Bob Iger revealed that FX would produce programming for Hulu, with four originals previously earmarked for the linear network heading to the streamer as part of a channel of sorts that will include scores of FX library titles like American Horror Story. While details on the so-called FX on Hulu hub are being ironed out, four of FX's shows — Cate Blanchett's Mrs. America, Kata Mara limited series A Teacher, Alex Garland's Devs and Jeff Bridges vehicle The Old Man — will no longer air on the linear network but on the dedicated FX channel on CEO Randy Freer's streamer.
Other new original series are expected to be moved to the FX on Hulu tab, which sources note could be positioned similarly to how Disney+ offers tiles promoting key brands like Marvel and Star Wars. Sources tell The Hollywood Reporter that a third of Hulu's scripted originals will be supplied by FX in 2020 and 2021. (FX and Hulu declined to comment.)
"They're trying to get people who pay for FX+ to move to Disney+," says ICM Partners managing director Chris Silbermann, referring to the company's bundled product of Hulu, ESPN+ and Disney+ for $13 a month."They're both known for high-quality original programming, and that should all reside in one place ultimately." (To that end, stand-alone subscription service FX+ was shut down in July.)
Disney and WarnerMedia's moves illustrate how legacy companies are positioning themselves for streaming in an era when, according to a March MPAA study, online video subscribers topped cable subs for the first time as Americans spend more than 52 percent of their viewing hours on digital hubs like Netflix.
"Hulu needs to carve a clearer brand and create more hit original shows," says analyst and former Amazon Studios head of strategy Matthew Ball. "FX excels at both, so bringing the two networks together makes sense." Cable and satellite distributors might not cheer the move. "The only group that doesn't benefit from John Landgraf and the FX team getting more budget and more shows via partnership with Hulu is pay TV providers," adds Ball.
The remaking of FX's production pipeline arrives as pay TV providers in the U.S. lost more than 1.3 million video subscribers in the second quarter, nearly three times the decline from the same period a year ago, according to an August report from Leichtman Research Group.
While HBO Max will be a one-stop shop for all of WarnerMedia's brands, the FX on Hulu setup further strengthens Hulu while adding value to Disney's streaming bundle. As Iger noted Nov. 7 on CNBC, "We've talked a lot and quite candidly about erosion or sub losses. They continue, which is all the more reason why we're doing what we're doing."
This story first appeared in the Nov. 13 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.