INTRODUCTION Businesses seek to lure customers to the brand by using Google Ads word program,…
The Simpsons show has made a name for itself as a modern-day Nostradamus. 20 years ago, the show predicted Fox’s takeover by Disney. On 17th December, 2017, the Walt Disney Co. in a $52.4 billion, all-stock deal, made a bid to acquire 21st Century Fox and its entertainment and sports assets to augment their already asset-rich portfolio, causing fans of superhero blockbusters worldwide to cheer. However, the deal has several other ramifications on the entertainment industry, some of which the Author attempts to discuss here.
Disney’s motivations are clear enough; the media company is morphing into a goliath, and today, there exists no David capable of taking on Disney at its own game. Disney has been on the lookout to “buy either new character or businesses that are capable of creating great characters and great stories”. The consequences of this merger are manifold. Firstly, and perhaps most obviously, Disney will own the rights to several successful and profitable titles, both TV-shows and movies. Several Marvel Studios properties that were sold off to Fox even before Marvel was bought by Disney will now return to Marvel (vicariously, through Disney). Secondly, Disney’s foray into broadcasting will be strengthened, as it now has more content to broadcast, and as it already owns the American Broadcasting Company (ABC) as a means to distribute their programming. Thirdly, Disney will acquire majority control over Hulu, the video-streaming company. Through expansion of Hulu’s activities worldwide, Disney can hope to take on the likes of Netflix and Amazon Prime, each of which have been steadily building up an extensive library of shows and movies to stream. Fourthly, Disney acquisition with Fox its highly-viewed channels such as National Geographic and FX will boost Disney’s advertising portfolio, by making Disney a one-stop-shop for advertisers. Thus, this merger is not of two rivals coming together; it is instead, a consolidation of complementary behemoths, the merger nothing more than a marriage of convenience.
Disney’s current IP portfolio, after its merger with Fox, is the stuff of dreams. Having previously acquired Miramax, Pixar, Marvel and Lucasfilm , Disney has established itself as the leader in marketable properties. Miramax’s influence in cinema has dwindled since the Weinstein brothers quit to start their own venture (which, given the recent sexual harassment scandal involving Harvey Weinstein, does not promise to be particularly long-lived), but has left behind several successful movie titles for Disney’s catalogue. Pixar has regularly been churning out heartfelt and commercially successful animated movies, including the Toy Story franchise, the Incredible, Cars, Monsters Inc. and Inside Out, to name a few. Marvel has been one of Disney’s most profitable purchases. Marvel’s Iron Man, Captain America and Thor, together with the ensemble Avengers films have become among the highest-grossing films of all time. Their ambitious Infinity War team-up has fans around the world breathless with excitement. Several of Marvel’s most popular titles and characters were sold off to Fox in Marvel’s dog days. The fan-favorite X-Men franchise and the original super-team, the Fantastic Four, now belong to Disney, and thus have returned to Marvel Studios. Lucasfilm, along with its special effects division has brought the Star Wars universe into Disney’s control. Fox owned the rights to broadcast, in perpetuity, some of the Star Wars movies, and now, these rights have reverted to Disney. These acquisitions make Disney poised to sit on top of the box-office, and also bring a sizable catalogue of content that Disney can stream on its own services, completely sidestepping Netflix, Amazon Prime and other streaming services.The most interesting consequence of the Disney-Fox merger is Hulu’s fate. Hulu has had a funny story. It is a joint venture, with the ownership shares as follows: Disney – 30%, Fox – 30%, Comcast – 30% and Time Warner – 10%. After the Disney-Fox merger closes, Disney will become the majority shareholder of Hulu, and can effectively control it. It may even attempt to buy-out Comcast and Time Warner, and turn Hulu to a full-fledged subsidiary.
Currently, Hulu only offers services in the US, and in Japan. However, given Disney’s vast catalogue of content, Hulu’s services can be expanded world-wide, as a direct competitor to Netflix, Amazon Prime and other streaming services. Whereas Netflix and the others are tech-driven and have only recently forayed into producing shows and movies de-novo, Disney has been in the game for so long, and has perfected the art of producing commercial flicks. Bright, Netflix’s most ambitious project, a 90 million USD film starring Will Smith and Joel Edgerton opened to low viewer enthusiasm and negative reviews by critics. Contrast that to Disney’s recent movies – Thor: Ragnarok, Star Wars: the Last Jedi and Beauty and the Beast, which were all critically acclaimed, and commercially successful. Clearly, if Disney does manage to turn Hulu into its own streaming service, it will prove to be more than capable of taking on Netflix, Amazon Prime and other streaming services.
All these developments, of course, are subject to the merger being allowed by the United States Department of Justice Antitrust Division. As this deal is a horizontal merger, i.e. a merger by which Disney aims to buy up a company that produces similar goods and services
(Fox), and will lead to a tangible reduction in the number of competitors; the deal is bound to be scrutinized with greater fervour. The deal would reduce the number of major film studios in Hollywood from six to five, and this have prompted concerns over both, the quality of future content, and the exploitation of auxiliary businesses by Disney, as it will negotiate from a position of absolute strength. Already, Disney is notorious for imposing unfairly high cuts from the share of movie revenue from theatres around the world. With their position consolidated, and their content highly sought-after, Disney will be in a position to dictate any terms they see fit onto theatres, producers, actors, and so on. The maxim, “Power corrupts, and absolute power corrupts absolutely” might seem trite, but is supremely relevant here. All- in-all the Disney-Fox merger is great business for Disney, but may not bode well for other players in the industry. The decision of the antitrust regulators will be gauged on and only after a very long drawn-out period of scrutiny only, can such a merger be allowed. The effects this merger will have can only be predicted by conjecture; the true effects will be seen only a few years into the future.
 “Disney Is Looking To Buy Even More Stables Of Characters”, Business Insider