The Changing Face of Entertainment: Studio Mergers

Once upon a time, there were several distinct titan studios of the movie industry. These titans were in fierce competition for your viewing time in order to serve you ads and make you buy crap. This was when competition forced innovation and creativity to be the driving force behind content. This was before the internet. This was a time when they were collectively responsible for most of the epic and memorable movies and TV shows that people will talk about still in the next 50 years at least.

In December 2017, The Walt Disney company officially confirmed their intent to acquire what we collectively have known as 20th Century Fox. Part of this deal included the 20th Century Fox Film and TV studios, their cable wing FX, National Geographic, Fox Broadcasting Company, Star India and a 30% stake in online TV provider HULU. This was to the tune of $52 billion.

In 2018, while waiting on the results of the AT&T anti-trust law suits, Comcast set on a path to outbid Disney by offering $65 billion. Disney counter-offered with close to $72 billion. Too bad for Comcast.

In the end, both the AT&T- Time Warner (2018) and Disney-Fox mergers (2019) pushed through. What does this have to do with us? Lets look at how/why the Disney-Fox merger will affect how we are entertained.

With broadband penetrating 70% of consumer homes in the US compared to the global average of 25.9%, coupled with cord-cutting options for entertainment like Netflix, Hulu and even major studios offering online only options- a major shift from traditional TV subscription models like cable which were the norm since the 80s is happening.

The result according to S&P Global Market Intelligence is there was a 3.7 % drop in pay-TV subscribers in 2017, 3.8 % again in 2018 and as cable subscriptions increase in price, virtual TV providers like Netflix, HULU, Amazon Prime video, HBO Now, Sling TV and others have been significantly cheaper than the $100.98 average monthly cost for regular cable.

I count myself as one of the 70% of payTV subscribers who feel that there seems to be too little value for the money we pay. I also fall under the group of folks who according to a Deloitte’s 2018 Digital Media Trends Survey keep cable only because it is bundled with home broadband services. To be fair there are traditionalists who want to stay with cable- and the data show that this is yet another generation gap where millennials are more willing to abandon tradition and start their households without cable on go online only whereas gen X and baby-boomers are more inclined to stick to what they know and are used to.

This decline in payTV subscriptions is however forcing traditional studios to look at tapping into the growing online only and mobile virtual TV marketplace. Studios like Showtime and HBO were early adopters who created online versions of their cable channels and others tried to follow. The biggest player to soon join in being Disney and their Netflix like service launching this year. This is one of the major reasons why the merger happened.

How will that impact what we watch? Let’s count just a few ways:

1. Star Wars Ep. 4-6 were originally owned by 21th Century Fox and will now be fully owned by Disney.

2. Super teams like the X-men and Fantastic 4 can come back to the Marvel Universe! Spin-off teams like the Runaways and the Gifted  (as well as our favorite R-rated anti-hero Deadpool) are now part of the same world as well!

3. The Simpsons on the Disney channel? It’s gonna happen!

4. Regional sports via YES and ESPN will now be under one huge sporting umbrella (sorry Comcast!)

5. International sports that were once via SKY TV which was 40% owned by FOX is also now Disney owned.

Shane:

I am all for this merger to happen. I do worry a little bit about all the content we are going to be consuming over the next few years coming from Disney. But Disney have shown that they are willing to show a variety of different content and not just the PG stuff. Looking at shows like Daredevil and The Punisher, these are dark shows. It is something that I wouldn’t necessarily associate with Disney, but they were willing to do it! After seeing some of the crap that came from Fox (and their ability to tank a Tronk movie), I’m glad IPs such as Fantastic Four and X-Men are going to fall into the hands of Disney and Marvel again.

Maybe in time, I’ll look back on this day and think “Wow, I really wish this had been blocked!”. But for now, I can only really look at the positives and think of all the possibilities that may come from this!

Evans:

Whether I’m for or against this merger is irrelevant at this point (it’s a done deal). The implications of this merger are far more widespread than what can be covered in a single post. Disney/ABC has dominated every aspect of our entertainment for decades, and now they have more avenues to share their media and ideas onto us. As a Marvel Cinematic Universe fan, I am ecstatic of all the Marvel character’s rights this deal gives Disney. Fox has, for the most part, done a horrible job with the Marvel titles that it has in its possession. I look forward to seeing how Disney will incorporate these titles into MCU.  As an individual who hates monopolies, I am weary of what Disney may do. I wish more networks would take the leap of faith on original action/adventure/heroes shows. However, with Disney in the realm, our TVs/computers/phones may soon be over saturated with these types of shows. This will limit the amount of original shows other networks may have been willing to take a gamble on.

In the next few years, I think we will see in which direction Disney goes with this deal. But for now all we can do is literally “sit back and watch”.

Your thoughts?
How much will this merger affect you and your entertainment habits?

Let us know in the comments!