Iger: acquired Fox R-rated, adult content to be on HULU, walled off from Disney streaming

HULU seen as ideal brand to distribute adult-themed Fox content Disney is buying

In its conference call to investors Thursday morning, The Walt Disney Company gave out a few details of its proposed purchase of 21st Century Fox, the parent company of the Fox TV and film empire.

Disney Chairman and CEO Robert Iger sees a vital role for the Hulu streaming service, which with this deal Disney will become the 60% majority owner.

“Hulu is a great opportunity to expand into the direct-to-consumer space,” Iger said, explaining that management and direction of Hulu will become more clear and effective with his company as controlling shareholder. Currently, HULU is equally controlled by Disney, Fox, and Comcast – with each holding a 30% ownership. Time Warner owns the remaining 10%.

Iger said he sees Hulu as the obvious OTT outlet for the more adult content that it will acquire with the purchase of Fox assets, such as American Horror Story and the studio’s other R-rated or TV-MA content.

When asked by analysts how he intends to take on Netflix with its big umbrella one-stop-shop where children’s programming and more adult fare are all sold for one price in one service, Iger said Disney was more about choice, defending Disney’s strategy of creating two niche diect-to-consumer streaming services under  ESPN and Disney/Lucsfilm/Marvel brands.

“Some people want pure family” options, Iger said. “Some people want pure sports.” Of course, he said, there would be an option for people who want all Disney content – including adult fare coming with the Fox purchase.

But when pressed, Iger did not say that everything would be on Hulu as a one-stop-shop alternative. Instead, he said, he repeated that sees Hulu with its current slate of adult-oriented original content as a better fit for Fox’s adult-themed programming that would not fit in with the Disney family friendly brand.

Iger said he could not give further details on plans for Hulu as Disney is not yet in control of the service.

The acquisition will be an all-stock transaction worth $52.4 billion dollars where current 21st Century Fox shareholders will get 0.2745 Disney shares fro every Fox share held. This will give Fox shareholders a 25% ownership of Disney while current Disney shareholder have a controlling 75% ownership, according to Christine McCarthy, CFO of Disney.

The current Fox management plans to keep certain assets such as the Fox broadcast network, news, business, and national sports as a spin-off company, tentatively called New Fox.