Disney (DIS 0.24%) has repeatedly made headlines in 2022 as more subscribers flocked to its streaming service Disney+. The company looks likely to be a major winner in the streaming wars as it has consistently grown its market share and offered engaging content that pulled in competitive viewing numbers.

While the company is pulling out all the stops to grow Disney+, the almost three-year-old service isn't Disney's first streaming endeavor. The company first ventured into streaming in 2009 when it became a stakeholder in Hulu. It gained a 67% majority stake in 2019 when it acquired 21st Century Fox and AT&T sold back its roughly 10% stake. Comcast (CMCSA -0.27%) holds the remaining 33%, and the two companies agreed in 2019 on a deal under which it could sell its stake to Disney as early as January 2024. As that sell date approaches, Comcast and Disney have commented on their hopes for the impending deal.

Disney has had a fruitful 2022, and full ownership of Hulu could further boost its earnings potential. As a result, Disney's stock looks like an excellent buy for the long term.

Beating the competition

On Aug. 11, Disney reported glowing fiscal third-quarter results as its total number of streaming subscribers between Disney, Hulu, and ESPN+ hit 221 million, topping Netflix's (NASDAQ: NFLX) 220.7 million for the first time. Disney+ primarily fueled its growth: Memberships reached 152.1 million in the quarter, amounting to 68.8% of the company's total streaming subscribers.

Moreover, Disney plans to hike prices across all its streaming platforms in December, in tandem with the launch of a new ad-supported tier for Disney+. Both introductions will raise the company's average revenue per user, a key metric in the streaming industry. In July, Disney's average revenue per user was $6.27 in the U.S. and Canada, significantly less than Netflix's $15.95. Now that so many viewers have recognized the value of Disney+, raising prices is unlikely to cost it many subscribers, and the lower-priced ad-supported tier will allow it to retain its more budget-conscious members. 

In addition to promising streaming growth, Disney reported a 70% year-over-year rise in revenue in its parks, experiences, and products segment to $7.39 billion. The company suffered record low park attendance throughout the pandemic, but 2022's rebound rectified the situation. Furthermore, since Disney posted its positive fiscal Q3 results, analyst Michael Morris revealed he was "confident" Disney+ will achieve profitability by fiscal 2024, with its peak losses in 2022. The company looks to have a bright future ahead.

Full ownership of Hulu

Speaking to the Financial Times on Sept. 12, Walt Disney CEO Bob Chapek voiced a desire to move up the timetable on its purchase of Comcast's stake in Hulu, and complete the transaction before January 2024. However, he suggested Comcast seems unwilling to do that. In 2019, the companies made a deal that set a minimum valuation of $27.5 billion for Hulu, and gave Comcast the right to force Disney to purchase its one-third stake. Comcast CEO Brian Roberts spoke at an investors' conference on Sept. 14 about how Hulu increased in value since 2019, with reports saying Comcast executives believe it is now worth about $70 billion.

As a result, while Disney would prefer the deal to be quick and neat, negotiations will likely be lengthy. Despite arduous negotiations, the effort will be well worth it to Disney. Chapek described various plans once Disney has full ownership of Hulu that could boost all aspects of its business. In addition to combining Disney+, Hulu, and ESPN+ into one competitive platform, the House of Mouse also described integrating park experiences for its subscribers. 

Disney forecasts to have between 230 million and 260 million total streaming subscribers by 2024, making it considerably larger than Netflix, and more growth options for Hulu could help it reach that size faster. The company plans to launch a subscription tier nicknamed "Disney Prime," which would offer discounts at its retail stores, parks, and various events, in addition to access to streaming.

The planned multi-service program has the potential to further lock consumers into the Disney ecosystem. As it stands, combining its three streaming services would provide content for children, adults, and sports, while the added retail and park benefits would be attractive bonuses for families. 

Is Disney's stock a buy?

After reporting fairly dismal financial results earlier in the pandemic, Disney emerged with a thriving streaming business, and visitors are returning to its parks in droves. Its share price remains 30% down year to date as investors became broadly pessimistic about the economy and concerned about the impact of tighter fiscal policies. As a result, Disney's price-to-earnings ratio is more than 70% lower than it was a year ago. 

Disney's negotiations to gain full ownership of Hulu may be tedious, but the company will be better positioned once they are complete. Unlike other acquisitions, this deal is not a question of "if" but "how much." Once it goes through, the company will be in a positive position to grow its business further and boost revenue, making Disney an outstanding stock to buy and hold for the long term.