(Image courtesy of the NY Times)
Disney is taking a monumental step towards its goal of creating a streaming service by purchasing large parts of 21st Century Fox for $52.4 billion. Disney will acquire most of Fox's sporting networks and television studios (according to BBC), as well as Fox's key investments in companies such as Hulu. (Fox will keep its news networks, like its iconic FOX News.) The merger is one of the largest in the entertainment industry, and will spell trouble for existing streaming services. Disney plans to launch its own streaming services by 2019 (according to the NY Times); merging Fox and Disney allowed the company to gain a foothold in the battle against Netflix, Amazon, and Google. Disney already owns ABC's network and made a name for itself as a growing media powerhouse when it purchase the rights to Star Wars in 2012.
While I personally don't follow business closely, the Disney-Fox merger frightens me. As an avid consumer of Netflix's online streaming services, I worry about the growth of industry monopolies, and with the FCC's recent repeal of net neutrality, I believe internet service providers and online streaming services will gain an unchecked power over the market. The articles from BBC and The Verge layout the various investments major companies have in streaming services: for example, Time Warner, Disney, and Fox each own an equal share of Hulu. I also worry that the government, with its chiefly conservative viewpoints, won't move to dissolve these monopolies and will instead enable their growth.
Discussion Questions:
1. What is your opinion on large media conglomerates?
2. Do you think the government should play a role in the regulation of emerging monopolies (especially in industries like online streaming)? Why or why not?
3. Do you think Disney's competition with Amazon, Netflix, and Google will help improve their services? Why or why not?
BBC
NY Times
The Verge
23 comments:
I’m a bit skeptical of Disney’s decision to purchase large parts of Fox in efforts to compete with other services, especially streaming ones. Netflix, Amazon and Google have already made huge advancements in streaming services and technology, so I’m not sure if Disney will be able to meet their advancements. However, we online streaming services have become much more popular, and for many, are replacing the use of cable networks. In that sense, Disney is catching up with the trend towards increased usage of streaming services, which may ultimately be beneficial to them.
I feel like anytime companies suddenly gain lots of power through actions like this deal, there is always fear for what that company will do, which is completely justified. So although I don't think Disney will eventually become a monopoly or anything like that, I feel like other entertainment companies should be cautious of what Disney could become. Also, I believe that the government should only step in once Disney's power gets way out of hand, so not anytime soon. And lastly, I think competition is always helpful because it provides incentive for competitors to keep doing better, and I don't think this situation is any exception. For this reason, I feel like DIsney's services will improve, especially with the new help and support they will receive from Fox and other possible future acquisitions.
I was also shocked to see that Disney purchased parts of Fox. With the company growing so large I wonder if that affects the quality of their broadcasts/content. Star Wars and ABC aren't struggling though, so I'm interested to see if Fox broadcasting changes in any way. I agree with comments above that competition against Amazon, Netflix, etc. could be good if it forces the companies to improve their services -- maybe access or range of available streaming -- but I don't know if it would also affect (raise?) the cost viewers would be paying.
I agree with Sahith that Disney won't become a monopoly. The merger can be good, and I believe that this merger will be good since they are popular companies, they'll do fine in my opinion. As long they give what the people want, there shouldn't be a problem. The gov't should only step in, only if Disney goes out of control. Disney is catching up with streaming, which will then improve their services, and they'll get more money.
I think that the Disney deal was done at a very convenient time, given the passage of the repeal of net neutrality. Since net neutrality allows ISPs to block, slow, or otherwise hinder or increase the speed of certain content in their internet service, Disney's new extension of influence is widely beneficial to them at this time. They compete with a lot of the media that internet service providers like AT&T and Comcast stream themselves (like video content). Because Disney has so much influence now, owning Fox and controlling shares (60%?) of Hulu, these ISPs are going to want to find other media sites to bundle (AT&T and Time Warner have already made a deal) to be able to compete with Disney and favor their own content on their on internet services. Other media groups will also be forced to cooperate or merge (less competitors for Disney). I'm less worried about the monopoly than I am worried about conflicts of interest, because ISPs now have a chance to make more money, and Disney taking over Fox has given them the incentive to do so. Some ISPs like Comcast have vowed to not be biased in their streaming, but if we shouldn't believe everything on the internet and Comcast has given us no reason to trust them to carry out their promises. Comcast and ISPs have been biased in the past, when there was no net neutrality. T-mobile heavily favored huge media brands like Disney and both AT&T and Verizon zero-rated their own video streaming programs over others. Of course, these investigations were dropped by the FCC Chairman Ajit Pai. Disney has a lot to gain from this deal and the merge affects so much more than just them.
Disney seems to treat our entertainments system like a game of monopoly. Just keep buying stakes in all the different sectors of entertainment and dominate them. Then you win!
I am not shocked by this deal, but like a few other people have mentioned, it is a little off-putting. Disney has grown in significant recently, acquiring a number of movie studio and production companies along with companies such as Fox. I think that's Disney's recent purchases and deals display a larger trend in US companies in which large companies such as Google, Apple, Amazon, and others are trying to spread their products across multiple markets and produce a wider variety of goods and services. Although it is unclear what the effects of such large company growth are going to be yet, it does make me worry a bit for smaller, or more specialized companies.
I don't think the federal government will allow this merger. Honestly, this will become a monopoly and look what the federal government did when At&t tried to purchase T-Mobile: It blocked the deal, even though there are many other phone networks. I think that competition is good because when the companies are all trying to compete for a customer's services, they try to sell themselves as good, causing them to create new features that they have that maybe a Netflix doesn't, or is less expensive than a Hulu. It will improve their services, as they will try to better themselves to sell to consumers why they are better than their rivals
I believe that this is an attempt by Disney to continue to diversify their future service options. This merger with Fox catapults them into direct competition of Amazon and Netflix as streaming service. As technology develops, I believe Disney wants to maximize their influence in Entertainment, Online Streaming while continuing the brand's current success in Film, Hotels, and Amusement. In deals like these, I believe the government should be able to block these propositions. The effects of these deals are widespread and can result in large shifts in the affected market. The competition between Amazon, Netflix, Google and now Disney will hopefully provide consumers with a range of accessible, cost-effective options. These corporations are all competing to become the main provider for many services to a large majority of the U.S. population, also inspiring innovation and improving technology.
I agree with Jack that Disney and other major corporations are trying to spread their services and expand their companies. I think Disney wants to join the trend of streaming since it is so popular today. I believe other companies should feel more cautious because Disney is so powerful and continuing to gain power from this deal, so they don’t know what to expect from Disney. They don’t know what they are competing against. Disney has these huge advancements and other smaller companies don’t have the same opportunities. I think that Disney’s services will improve with such a greater expansion to their company with the addition of Fox. However like Ashley said, Netflix, Amazon, and Google are already so successful, how much more improvement can Disney make? Disney is ultimately trying to gain as much power and try to become the main coverage for the population, so I think until Disney’s power becomes uncontrollable, government doesn’t need to take any action.
I think Disney has really expanded itself in the last few years and it seems they have a much larger goal for themselves than the public can even comprehend. As much as I love Disney, I think this merger should be viewed skeptically, and the government should involve itself to a certain extent to prevent major monopolies from totally controlling the market. It seems as if some point Disney will control everything and there will no longer be any other competing companies. In regards to the streaming Disney wishes to implement, I'm curious to see if it will get a lot of business since many people are quite contempt with Netflix and Hulu. Lately, I feel like Disney has been making some decisions the public disagree with, especially when they took over Star Wars, so I think this merger is going to get a lot of push back from the public.
I think Netflix, Amazon, Google and other similar streaming providers will need to be on the lookout for what Disney can accomplish. However, I don´t think it will become a monopoly. It is true that Disney has a lot of potential, and this may actually cause other streaming providers to improve their services, but Netflix is currently so popular that many may be skeptical to make the change. Netflix has been the ideal streaming service for a while and offers people a sense of comfort and familiarity. Some may be reluctant to make the switch, as they have become so used to using Netflix as their go-to streaming provider. Netflix may even improve their services to compete with Disney, so there will be tough competition that may be enough to keep Netflix in the lead and keep its strong position in the streaming services.
Like Keertana mentioned, Disney has a significant amount of potential to compete with other streaming services, but Netflix has established services that people are familiar with. Therefore, while Disney may pull users over to their content from Netflix, I also believe that both Amazon and Netflix have relatively loyal client bases. Here, I agree with Lydia's comment in that smaller companies may be affected by the merger, but that popular ones will likely maintain their hold with a stronger competitor in the market.
However, I think another issue with online streaming is that a lot of other websites offer free streaming of TV shows and movies. While I do not actually have any data concerning the percentage of users who stream content illegally, I think it would be a significant amount.
While I am excited about what the Disney-Fox merger has to offer in the upcoming years, I, like some others, am a little bit skeptical and worried of what this will mean for the industry. When I first heard about talks if the possible merger a few months back, I became a little happy thinking of the possible combinations that this could create, like an Avengers and X-Men crossover. However, now that I see the full details of the merger, it's easy to see that Disney is trying to build their company up to become one of the most powerful in the entertainment industry and quite possibly, in the world. The amount of hype people give to their future projects in the upcoming years will only strengthen Disney and further increase their influence. And with Disney launching its own streaming service soon, Netflix, Hulu and other streaming services will simply keep producing certain movies or shows that they feel would be enough to challenge Disney. In a way, this hurts streaming services the most since they would take their focus away from original, yet unpopular series and focus more on their most popular shows, like Netflix's Stranger Things, to keep up their challenge against Disney. So although Disney has a lot of potential for the future, it will no doubt hurt its competitors as well.
This merger worries me. While not a full monopoly, Disney is moving towards dominating the entertainment industry. As an already giant corporation, and taking on Fox, Disney poses a threat to smaller streaming services. Companies such as Netflix and Hulu already have strong bases and will be able to survive, but if anyone wants to create a new service, or in any other way try to break into the entertainment industry, it will be extremely hard. This merger discourages creative entrepreneurship, and could, in the worst case scenario, hurt the economy. This is reminiscent of corporate monopolies in the Gilded Age, and new legislation about monopolies on the internet may need to be introduced to combat new problems we face in the age of new technology.
I don’t believe that the merging of Disney and Fox is troubling in and of itself, though I can see how the merge could become problematic in the long run. I agree with Haley that, as long as there are other competitors like Netflix, Amazon, and Google, companies will need to improve their services in order to compete with one another, thus benefiting the consumers of these online streaming services. However, this could potentially turn into a problem for consumers if a monopoly is eventually formed among these companies, at which point I believe that the government should take steps to regulate the industry.
I find Disney's massive buy-outs, particularly within the film industry, to not be ideal. Anytime a massive conglomerate swallows up more independent studios means these studios run the risk losing the animation style that made them unique in the first place. As of now, Disney already owns Pixar and Lucasfilms, as well as the Marvel franchise. That being said, however, expanding their empire may be out of necessity, as their main competitor, the conglomerate Universal Studios, is growing rapidly. Universal Studios owns Illumination (produced the Despicable Me movies, How to Train Your Dragon, The Secret Life of Pets) and Dreamworks Animation (Kung Fu Panda, Madagascar, Shrek, etc.), all of which have consistently generated more box office revenue than Disney movies in the last decade. Thus, given that the film industry is already basically divided into two powerhouses, Disney did make the logical decision to buy out Fox (along with the legendary 20th Century Fox films) and fortify its assets.
I think that Disney's buy outs could be problematic. It seems like these massive buyouts prove that Disney is well on its way to dominating the entertainment industry. I believe that Disney conveniently, along with other major corporations are trying to spread their services and expand their companies with the passage to repeal net neutrality. Large companies like Google are trying to create more leverage with their products to create more services in multi market deals. This wider variety of goods among large media conglomerates scares me a bit, although we don't know the immediate effects. Disney will benefit from this in my opinion because it gives them enough skin in the game to create outlets to more entertainment industries which could be a valuable asset. However, even though Disney has an upside for the future, many of their competitors can get damaged.
Disney has always been more children's based (Disney Kids and the Disney Channel). I think that this merger indicates a shift to a larger audience, allowing Disney to gain more revenue in the process. It also would have been harder for Disney to switch to a different age group (that would mean a complete re-branding from what kids customarily watch). These buyouts, starting with Star Wards, and leading up to Fox are worrisome in my opinion. Due to this merger, Disney has a much firmer grasp on many popular TV shows and gives them a leg to stand on in their battle against Netflix, which has arguably already monopolized the streaming industry. They now own many shows that are readily streamed on Netflix and I can foresee them porting it over to platforms such as Hulu. This is unfortunate because Always Sunny in Philadelphia suffered a similar fate, already showing an opposition to Netflix's influence in this industry. Disney now poses a threat to many of Netflix's shows (except Netflix Originals ofc). Disney now owns a vast number of franchises that they could very well create their own platform.
I agree — this is definitely a frightening precedent to set. It is vital for the media to remain un-monopolized, and this is a step in the wrong direction. Over the summer, the Chicago Tribune attempted to buy the Chicago Sun Times (its rival and the only other daily paper in Chicago), but the bid was rejected in the name of preventing monopolization. This is exactly how the media should be prioritizing an avoidance of monopolization, but unfortunately the Disney-Fox merger only gives Disney an unprecedented amount of leverage. Now, it likely will be able to compete with corporations such as Verizon and Comcast. I recently read an article titled, "Net neutrality is dead. It’s time to fear Mickey Mouse," and I think this perfectly sums up this entire issue. Very few people realize how threatening this is for the state of our media — after all, it's just Mickey Mouse, how much harm can he do? — but in fact, it's a huge deal that cannot be ignored.
While the merger is worrisome for most, personally, I am excited about this merger, as it opens up many opportunities for different movies to be made (specifically by Marvel). With both the X-Men and Fantastic Four back under the Marvel Studios Banner, it is a good time to be a comic book fan.
I'm no media expert as I rarely watch movies and tv. But the idea of Disney becoming a 'media monopoly' is quite absurd. We live in an age where a rookie studio can upload "Ping Pong Trick Shots" and gain millions of views on youtube, and where services like Netflix once dependent on licensing are now creating their own shows.
It's terribly difficult for any company to be a monopoly without the government colluding with them. We have plenty of domestic and now foreign competition (see Alibaba), and at the end of the day entertainment media companies really only make money by making us happy.
I think the Fox-Disney merge is a huge deal for the company. Expanding their brand to internet streaming will not only generate more revenue and spark competition, but it will expand Disney's audience to more adults who using streaming networks. As for company's like Netflix and Amazon, the Disney-Fox merge will make their business more competitive, but I think that it won't have as big of an effect as they think. I personally use Netflix to watch tv, and even though Disney will be expanding into that domain, I won't stop using Netflix for a new streaming service because Netflix has all the shows I want. I think this competition will actually benefit users, because companies like Amazon, Netflix, and Google will try to expand their business and attract more costumers to their services rather than Fox-Disney.
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