It is official folks, Disney now owns 21st Century Fox or at least a portion of it. There has been a lot of news over the past year about the acquisition of Fox by Disney and lots of hurdles along the way but the Disney Fox merger is official as of March 20th 2019. This was to the tune of $71 billion dollars. There is a lot of speculation of what this means for both companies and what will happen going forth. This is the 4th major merger that Disney has gone through within the past 10 years including Marvel, Lucas Arts, Pixar and now Fox. This has fueled debate from both sides, for and against the merger and the long term ramifications. One of the biggest things being discussed is how this will benefit Disney when launching its own streaming service, Disney +
With the launch of Disney + later this year, we were informed that Disney would include its entire movie library and will be home to a whole host of new shows including Star wars and Marvel spin offs. However, with the acquisition, we may even see shows like “Masterchef” “Modern Family” or even possibly “The Simpsons”. We will have to wait and see how this plays out in the future.
Potential issues
Staffing changes
Some of the controversy that has surrounded the acquisition of Fox has been two fold, potential for layoffs and creating a monopoly after buying Fox. It is never good when layoffs occur and I do feel bad for the employees that go through this. However, Fox was selling assets anyways and Disney is the one’s who ended up having the highest bid. No matter who the buyer is/was, there would have been layoffs regardless. This was not Disney being spiteful, it’s the unfortunate side of business. And there is always the possibility for there to be other jobs that arise to minimize the job loss.
Potential for a monopoly
The second is the creation of a Monopoly. This is true that Disney Fox merger will give Disney the majority share of the entertainment industry at around 46%. At 46% this is quite a sizable portion of the industry compared to the other studios, the closest of which is Comcast at 13%. This is not the greatest for diversity at the movie theaters, however it may not be as bad as people are anticipating. With this Disney reported that they will continue some of the work of Fox, such as with Deadpool (who is technically Marvel anyways). But this is likely true for other types of movies as well to diversify the movies released.
The other part that comes into play is movie theaters aren’t going anywhere but streaming services seem to be moving towards taking center stage. With the success of Netflix, a lot of studios are moving to create their own streaming Juggernauts. We started to see this switch when AT&T bought Time Warner in hopes of boosting streaming services and more recently DirecTV now. As you can see this is nothing new to the industry and won’t be the last.
There is more of a monopoly issue with ISP starting to buy out studios as there is always the risk throttling speeds for competitor streaming services or other potential issues. I’m not saying we shouldn’t be a little weary of the potential for a monopoly but may not be quite as impactful as we may see in the future. Part of the stipulations of the merger with Fox is that Disney has to sell off Fox Sports as they already own ESPN; one of, if not, their biggest competitors
Moving forward
In a letter that Bob Iger, Disney CEO, put out to his employees, he put forth the challenges ahead and the encouragement of what this means. “I wish I could tell you that the hardest part is behind us: that closing the deal was the finish line, rather than just the next milestone. What lies ahead is the challenging work of uniting our businesses to create a dynamic, global entertainment company with the content, the platforms, and the reach to deliver industry-defining experiences that will engage consumers around the world for generations to come” Bob Iger, Disney’s Chief Executive in letter to employees.
We will see what comes about with the new Disney Fox merger and how this impacts the entertainment industry as a whole. This will unite almost all of the Marvel universe back under one company and will likely see this play out in the next few years. The quickest impact that I foresee would be with the Disney + streaming service coming this year and being able to expand their content for a wider range of content to appease the entire family.
What are your thoughts about the merger?