Family-friendly Disney to bring edgier Fox fare to streaming video

LOS ANGELES (Reuters) - Walt Disney Co DIS.N is poised to add foul-mouthed superhero Deadpool and gory TV series "American Horror Story" to its portfolio, a novel move for the king of family-friendly entertainment into the adult-oriented programming consumers are devouring on streaming video.

FILE PHOTO: Walt Disney Company Chairman and Chief Executive Officer Robert Iger announces Disney's new standards for food advertising on their programming targeting kids and families at the Newseum in Washington June 5, 2012. REUTERS/Gary Cameron/File Photo

Disney's deal to buy most of the film and TV businesses of Twenty-First Century Fox Inc FOXA.O will aid the efforts of Disney Chief Executive Bob Iger to transform the company from a traditional media operation dependent on pay TV distributors to one that streams shows and movies directly to consumers online.

With the Fox deal, “they have content for everyone,” Tigress Financial Partners analyst Ivan Feinseth said. “They have family-friendly content, but that does not need to be the only thing they do, because there is a broader audience looking for a broad type of content.”

In acquiring the Fox assets, Disney will also gain majority control of Hulu, a live TV and on-demand video provider that competes with Netflix Inc NFLX.O, the dominant streaming service.

Disney plans to make Hulu the home for programming aimed at adults such as FX series, keeping it separate from a Disney-branded streaming service for families planned for 2019, Iger told reporters on a conference call.

“It’s an opportunity for us to take some of these brands that don’t necessarily share all of the Disney brand attributes and use them to grow Hulu,” Iger said.

FX airs shows such as the bloody "American Horror Story" and the dark and often graphically violent drama "Fargo," a type of programming more akin to series found on Netflix or Time Warner Inc's TWX.N HBO.

Iger said Disney has shown itself able in the past to successfully integrate new kinds of programming into its mission. Disney previously acquired Pixar Animation Studios, superhero studio Marvel Entertainment and “Star Wars” producer Lucasfilm and has given them a large degree of autonomy.

That experience “suggests that we will be able to integrate these brands into the company in a manner that does not in any way create negatives for us,” Iger said.

In March 2016, after Fox’s “Deadpool” movie became a huge hit, Iger was asked at the company’s annual shareholder meeting if Disney would consider making similar R-rated films featuring its Marvel superheroes. Iger said Disney did not plan to.

On Thursday, Iger pulled back from that position, saying that characters like Deadpool might provide a model for an edgier kind of Marvel movie.

“We think there might be an opportunity for a Marvel R brand for something like Deadpool,” he said, “as long as we let the audience know what’s coming.”

Reporting by Lisa Richwine in Los Angeles; Additional reporting by Aishwarya Venugopal in Bengaluru; Editing by Sue Horton and Bill Rigby