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The Mouse That Ate Hollywood
It’s been rumored for a couple of weeks now but it became official on Thursday morning. The Walt Disney Company is acquiring the majority of assets from 21st Century Fox, thereby creating the world’s largest media company by far. This deal will have regulatory hoops to jump through all over the world and will probably take 18 to 24 months to close.
It’s much easier to list the assets that Disney will not get as opposed to what they do get. Not included in the deal:
- Fox Broadcast Network
- Fox News and Fox Business Channels
- FS1 and FS2
- The Big Ten Network
- The Fox Lot in Century City
What is included in the deal are the Fox Sports Regional Sports Networks. This will gut the available streaming content on FoxSportsGo. It will also be interesting to see if Disney chooses to hold on to them or spin them off to someone like AT&T who has jumped into the RSN business with their purchase of Root Sports last year. It could provide product for the new ESPN Plus streaming service and see all of the regionals rebranded under the ESPN name. Or taking on all of the additional rights fees for a contracting cable universe could be a killer. Disney could save tons of money by nationalizing the content of the regionals but maintaining the distribution model. In other words, why have two separate feeds for the home team and the away team when you could have just one under the ESPN banner? What the teams lose in in-game promotion mentions could be compensated for in free commercial spots.
This deal also marks the end of the Hollywood Big Six. All of the movie studios have been bought and sold many times over but this is the first deal that sees one studio purchase another. And by buying Fox’s stake in Hulu, ComcastNBCU will be left distributing its product over a service that they no longer have an equal say in. Could NBC then join CBS in offering its own over-the-top service? And if Hulu loses all of those programs why would it need to exist at all? The network content currently streamed could easily be folded over into the new Disney streaming service set to launch in 2019.
It also slightly changes the political world. Disney Chairman Robert Iger was said to be eying a run for the Democratic nomination in 2020. That ends because part of the deal is that Iger stays put at Disney until at least 2021.
The buzzword you’ll be hearing a lot of is “efficiencies.” For 21st Century Fox employees that’s going to mean job losses. Disney has gotten really good at that.
Published in Culture
Well, I don’t know what all this will mean or deliver. But I do know that now the Fantastic Four are back in the hand of Marvel as are the X-Men. Thank God because now Marvel can stop giving these characters the short shrift because they don’t own the movie rights. Could we be getting a goof FF movie in the future? I hope so.
What might this mean for Fox News? More or less freedom? More or less money?
As noted in the OP, Fox News didn’t go to Disney, so no less freedom. I don’t know if Murdoch will spend some of his gains on FNC, but it’d be a good bet.
Probably not much. Except for breaking news and special events like the SOTU, Fox Broadcast has been loathe to get into the news business on a national scale. If that were to change then the news division might see a need to expand.
On a related note, I was surprised to see Disney finally offering discounts on digital movies. The discounts are not as great as those regularly offered by other publishers ($15 discounted price at the cheapest, whereas $8-12 is common), but it’s nice to see them surrendering to the market.
The market probably doesn’t require a $10 Cinderella. But $15 for The Black Cauldron is just stubborn.
Get them while you can. Soon they won’t sell them at all. They’ll only be available as downloadable rentals or streaming. They don’t want your kid binging on a movie that translates into pennies per viewing. They want you to rent it again and again or subscribe to their streaming service.
This moneymaking approach is similar to Microsoft, Apple, and Adobe. All of them want to be able to reach into your bank account on their own every month. And how easy it is to just ratchet those fees up whenever they want. It’s the IRS payroll deduction thinking let loose in the private sector. I do not like the way this looks in the near and far future. It is too much connectedness.
How about TV property? Do you know much about what Disney bought on that side?
My rule: never allow auto pay direct from my credit card or bank account. I have recurring payments set up in such a way as to not allow any deviation from the amount agreed upon. None of my vendors have access to my bank account or my actual credit card. One of my cards has a program that allows me to set up a secure “mirror” number with a specific credit limit and expiration date which I can cancel in 5 seconds. Sorry for being off subject.
So what happens to Netflix Marvel? Does Disney pull that too into it’s own platform? To be honest Disney makes enough things I like, Star Wars, Marvel, Pixar, and their classic cartoons that I might be willing to go in on a subscription service with them if they have enough content. I can always cut Hulu which I don’t use that much. The other thing is it is easy to switch between services so you get it for a few months to watch the show you want and some others, then move to a different service. Frankly anything that kills off cable TV is a win in my book. Talk about antiquated. Subscribe to 150 channels and watch only a few of them and you have to do it at the times they tell you! Unless you pay extra for DVR!
I think you are being overly pessimistic about it. There is a ton of inefficiencies built into the market by having to buy and own things that you only use sometime. By having a renting model you can actually tailor the cost more accurately to consumption. Otherwise you have mass consumer freeloading off of the frugal one time users. If you watch Disney movies nonstop for 6 hours each day why should you pay the same thing as some one who watches it for 2 hours each week? If you want to counter act this move just liberalize the copyright laws. Start letting content fall out of copyright with age like it is supposed to. No reason Disney should have the rights anything older than 30 years I would say. While they could trade mark Star Wars and Disney itself, they should not be able to control the original copies. Which would then fall as they should into public domain. Like Charles Dickens, Shakespeare, Homer, etc.
I have no automatic withdrawals from the debit account anymore. Now I make the payments myself. And I’ve pushed most of my online business to a credit card rather than letting anyone get their paws into my checking account. :)
I’m not sure I understand your point. I would say that if I owned a movie or television series, I could watch it forever and as many times as I wanted. I don’t understand why that would affect the rental market for those titles.
Everything that Fox Studios owns goes to Disney. That includes Modern Family and a lot of the product on Fox Broadcast.
They also get FX and NatGeo. A lot of Murdoch’s television investments have been overseas.
Disney branded product was scheduled to leave Netflix in 2019. Individual shows that are produced by Marvel Studios for original Netflix distribution are most likely separate deals.
I think Hulu, like Netflix and Amazon, is also producing its own shows now. Of course, that probably wouldn’t be enough on its own..
Hulu was 30% owned by Fox, Disney and NBC as a way to monetize their next-day on-demand distribution. Three competing networks with an equal share. Now Disney is the big fish controlling everything. Original programming will still find a home, the question is where.
This is definitely a plus – especially for a household with only one or two people. For a family, it becomes more of a negotiation if everyone likes something on a different provider – still doable, just harder.
Because theoretically, you’ve shrunk the size of the rental market. If you didn’t own the movie and had to rent it everytime you wanted to watch it, they’d obviously get more money out of you. You may only be one person, but multiply that by millions. Now you’re talking a lot of money.
Besides a huge chunk of cash, do we know what Murdoch is hoping to get out of the deal?
The Federalist Radio Hour podcast has an interview with Stephen Kent about what Disney will be doing. Kent even thinks Disney might eventually produce movies that it only streams on its own streaming service and doesn’t put in theaters at all. (The first half of the podcast is about the Star Wars movies. The Disney discussion is in the second half.)
Murdoch is 86. He has two sons, James and Lachlan in business with him. James may get a seat on Disney’s board and eventually succeed Bob Iger. What’s left of Fox, a smaller company by far, might be easier to take private. Lachlan will probably become CEO of Fox and it may eventually folded back into NewsCorp.
Murdoch going back to his roots in news. Except, of course, for the whole Sky Sports empire.
Perhaps Fox News can now take the gloves off vs. Big Hollywood…
I’m not sure what the point of the Fox Lot without the attached movie assets is, but perhaps it’s just surplus studio space.
(Cartoons – I could care less. But with some difficulty.)
The Fox lot isn’t what you imagine. It is greatly reduced from its heyday. Big chunks of it was sold off to prevent Cleopatra (1963) from tanking the entire business. The Longest Day helped save it, too.
My apologies for not being clear. When one buys a movie for 10 dollars (because it will make math easy) and they watch it once. That viewing cost them 10 dollars. When you buy the same movie and watch it 100 times each viewing costs you .1 dollars. What Disney is selling you is viewing of a movie. In theaters it costs 8-12 dollars per viewing. For the DVD the price per viewing is hard to pin down because it is based on too many variables. Essentially the problem is this, people each value the product to different degrees, and ideally you should sell it to them at something close to their value. The reality though is that Disney movies are over priced for infrequent viewers and under priced for avid viewers. By having a complete digital rental model you can tailor the cost to peoples priorities better. This means probably more frequent viewers will be charged more, but on the plus side casual viewers will be charged less. For frequent viewers you can come up with more elaborate packages and bundles. Kind of like with sports channels on TV. The modern digital age will mean more tailored service for which we will pay more but we will get higher overall value per dollar which is still a win. Most likely we will just cut out the entertainment bloat to focus on what we really like.
So I guess my dream of watching hockey over the internet without a cable subscription is not going to happen. ESPN will just kill it off like they’ve done with NASCAR and the NFL.
I think the NHL can just do it’s own streaming. They don’t need ESPN. Once they realize this you will be able to watch all the Hocky you want.
I agree and have been waiting on this. I guess they don’t have the money to do it on their own. The last sentence was more a knock on ESPN than anything else. I really should thank them because the turn to the political and away from just sports helped me to “cut the cord”.
MLB runs the streaming operations of the NHL. If you have a local team you root for you’re out of luck. They protect the local rights holders by demanding you subscribe to cable.
However, if your favorite team is out-of-market you can buy single team packages.