The Meaning Behind Disney’s ABC and Hulu Restructure, According to Experts

As part of Disney’s recent reorganization, the company will merge ABC and Hulu’s scripted drama and comedy teams. According to experts, several factors were likely behind the decision, including content costs, industry streaming TV trends, and more.

What’s happening

As part of Disney’s reorganization, Simran Sethi, who was most recently the executive vice president of programming and content strategy for ABC Entertainment and Freeform, was promoted to president of scripted programming and will lead the newly combined ABC and Hulu scripted content teams. 

The changes resulted in the shuttering of Disney’s ABC Signature production unit, which will be folded into 20th Television under president Karey Burke. Tracy Underwood, who was upped to head of ABC Signature in December, will exit the position and move to an overall producing deal at 20th TV.

Meanwhile, Jordan Helman will serve as executive vice president of drama for Hulu Originals and ABC Entertainment, while ABC’s senior vice president of comedy programming, Erin Wehrenberg, will exit. Helman will report to Sethi and oversee the comedy team in the meantime.

TheWrap reported that 30 Disney Entertainment Television employees will be impacted by the recent reorganization, which comes just after a round of layoffs that impacted 300 corporate Disney employees, 140 Disney Entertainment Television employees in July, and 175 people who were laid off from Pixar in May.

Why it’s happening

For Ross Benes, a senior analyst with eMarketer, the changes make sense given Disney’s assets.

Benes explained that since Disney agreed to buy out Comcast’s share of Hulu, it’s been easier for the company to incrementally fold Hulu into its business.

“It deployed its ad server to Hulu, made Hulu available within the Disney+ app, and now is combining a Hulu work unit with another division,” Benes told ADWEEK. “Because Hulu never expanded internationally, it would not be too difficult to eventually subsume it with the Disney brand.”

Regarding the most recent reorganization, Benes said it allows Disney to trim some costs “through the unfortunate practice of layoffs.” 

“Legacy media conglomerates are giant entities that currently struggle to grow profits, so more of these moves will be made at Disney and other companies owning TV networks,” Benes said.

Consumer demand is another consideration.

Dan Rayburn, a streaming media expert, said people need to be looking at how much content ABC and Hulu produced in the scripted comedy and drama divisions, especially as consumer preferences change.

“If they’re not doing that much, it makes sense to combine them, naturally,” Rayburn said. “When things like this happen, good businesses are always strategically looking at how they create content, how much of that content they’re creating, and if there’s overlap in between organizations in terms of working on the same goal.”

What happens next

As the industry moves forward, shifting audience preferences will always be top-of-mind for publishers, according to Rayburn. And it’s a costly game to play, considering Netflix said it would be spending $17 billion on content in 2024.

“Disney, Netflix, and all these guys are constantly changing and evolving how much content they have to create across what type of genre,” Rayburn said. “That’s the hardest part of their business.”

For a look at the future of the industry, Mike Proulx, vice president and research director at Forrester, pointed to the bottom line.

“Just look at the balance of investment,” Proulx said. “We’ve officially reached the turning point towards an all-streaming television landscape where traditional linear TV plays second fiddle to streaming’s original programming and distribution reach, eventually going away altogether.”