Disney’s Acquisition of Fox Could Change Streaming Forever
Well, it’s finally happening. After weeks, if not years, of speculation, the Walt Disney Company announced this morning that it is acquiring nearly all of 21st Century Fox. The $52.4 billion (yes, with a b) acquisition is one of the largest in media history and brings Fox—which controls everything from The Simpsons to the X-Men, Fantastic Four, and Deadpool—into the same house as Pixar, Star Wars, and most of the non-X-Men parts of the Marvel universe. It’s also a deal that will reshape the entertainment landscape—and streaming, in particular.
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As it stands now, the properties managed by Disney and Fox are scattered across a slew of services, from Amazon to Netflix to Hulu—the last of which Disney now holds Fox’s 30 percent stake in, meaning it now owns most of the service (it already had a chunk thanks to its ownership of ABC). That’s likely not going to change immediately; existing contracts, some of them years-long, have to play out. The deal also won't impact Fox's broadcast networks, apologies to Fox News Fans. (This is also a good time to remind everyone that the companies that make content don't always air it; 20th Century Fox can make shows for NBC, etc.)
But Disney has been planning to launch its own, currently unnamed, streaming service in 2019. The company has already said that its Marvel and Star Wars films will find a home there, along with all a handful of new series that live in those universes. That alone made Disney's future streaming offering an inimitable force. Add the toys in the Fox war chest, and it starts to look unbeatable.
Think about it: If Disney has access to all of its current holdings—an already staggering amount of movies and TV—plus all of Fox’s movies and TV studio output, that’s an insane amount of content. Consider, too, that Disney has publicly said that it plans its streaming offering to come with a monthly cost "substantially cheaper" than Netflix.
To give an even better sense of just what kind of juggernaut this is creating, here’s a sampling of what Disney is getting from Fox: The X-Men universe, which includes the Deadpool and Wolverine movies, and powerhouse franchises like Avatar, Planet of the Apes, Alien, and Die Hard. It brings in family-friendly fare like Ice Age and Alvin & The Chipmunks. And then there are all the shows from the National Geographic Channels, along with a slew of TV properties from Modern Family to American Horror Story to It’s Always Sunny in Philadelphia.
The effects aren't just positives for Disney; they pull the rug out from competitors who rely on Disney and Fox content to round out their streaming catalogs. While Netflix, Amazon, Hulu, and others have stressed original content in recent years, partly as a hedge against this very sort of problem, losing reliable hits from major studios puts more pressure than ever on their homegrown efforts. Netflix didn’t start outpacing cable just because it had Lilyhammer, after all.
Maybe most importantly, it illustrates the future of streaming fragmentation, one in which there's no such thing as a one-stop shop.
“Content owners are now realizing they can go directly to consumers and don’t need an aggregator,” says Dan Rayburn, a streaming media analyst with Frost & Sullivan. “Is it a competitor to Netflix and Amazon? Over time, it will be.”
This is certainly true. In recent years lots of media companies have gone straight to consumers with offerings like Showtime Anytime and CBS All Access. In this climate, the likes of Netflix and Amazon should be feeling pressure to keep up, and broaden, their original content.
Rayburn adds, though, that it'll take time time before any direct-to-consumer offering—including Disney’s—will catch up. He also cautions that even though one service has all of Disney and Fox’s movie and TV offerings, it’ll still be yet another shard of rapidly splintering market that’s only getting more cumbersome for consumers all the time.
“We want options, but at the same time it’s very fragmented,” Rayburn says. “That’s the downside—there’s no one aggregator that’s aggregating everything, and the reality is that’s not going to happen.”
Perhaps not. All of the streaming powerhouses now have enough in their coffers that they can’t disappear without being missed, and viewers aren’t likely to just give them up because another service has a robust offering. But this latest merger does signal that big changes are coming to streaming. It’s still largely Netflix’s and Amazon’s domain, but there’s a mouse in the house now.
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