The defection this week of Hulu leader Kelly Campbell to become president of NBC Universal’s Peacock streaming service has really brought out the disgruntled Hulu employees. Probably because I first broke the news on Twitter, staffers past and present quickly filled my DMs.
Since Disney took operational control in 2019, Hulu has become “toxic,” one mid-level executive said. “Total dysfunction,” messaged another, citing the layered management and the split of creative from distribution under Disney C.E.O. Bob Chapek’s re-org. A “brain drain” of executive talent and staff has ensued, noted two separate people. A lot of unhappiness and questions about the direction of the unit, it seems.
I wrote a month ago about some of the macro issues plaguing Hulu: It’s not global; it enjoys big demand for licensed content from its legacy media partners but still generates low demand for originals; there’s little long-term strategy because it’s mired in a dispute with partner Comcast over the value of the service and Disney’s decision to instead pursue Disney+ and Star growth overseas. I also wrote about some of the recent momentum at Hulu, including increased subscriber numbers and more commercial hits like Nine Perfect Strangers and Only Murders in the Building, with tons of premium adult-skewing content on the way from Disney suppliers. So I won’t elaborate on those plusses and minuses here.
But another, and possibly underrated, aspect of the unrest at Hulu is the recent “leveling” of employees that Disney has undertaken since the absorption of most of Fox in 2019. The titles, compensation, benefits, and duties of many Fox people didn’t match Disney, which is often true when companies acquire large businesses. Management consultants and H.R. experts then dive in and figure out the best way to “level” everyone into a cohesive organizational structure. Pretty standard.
However, that process recently concluded, and at Hulu, which functioned like a tech start-up, the changes were particularly pronounced. Employees who were used to stock options and annual bonuses were suddenly leveled into the structure of a century-old media company that doesn’t offer those perks as liberally. Specifically, I’m told, Disney agreed to pay a bonus to many employees for 2019, but ended that practice for 2020. And many—especially younger employees—suffered the equivalent of salary cuts. Health benefits also worsened for some. (A Hulu rep notes that some employees saw their compensation and benefits increase; the division rep declined to comment further.)
Longtime “Hulugans,” as they call themselves, have also complained about a distinct shift in company culture since creative and distribution were split. “Hulu people feel attacked by Disney leadership, and that Hulu and the culture that made it unique is dead,” one recently departed executive messaged me. Campbell, a Google alum who had spent four years at Hulu and about a year and a half in its president role, is said to have fielded the brunt of those company concerns. Insiders weren’t shocked she bailed.
The Disney leveling hasn’t just impacted Hulu, of course. A Disney lawyer I know, who had come over from Fox, told me a couple weeks ago that his compensation package had been trimmed in the leveling. (A Disney rep declined to comment on that when I asked.) I’m sure others will reach out after reading this, though again, this kind of streamlining isn’t unusual.
What should be concerning for Disney, though, is if the “brain drain” at Hulu has become a longer-term problem. That happens at acquired companies sometimes, with potentially significant ramifications. It didn’t seem to be a problem at Pixar or Marvel or even BAMTech, another tech company Disney acquired. Maybe retention bonuses are in order at Hulu?