In December of last year (still feels weird saying that), Disney announced its intent to acquire 21st Century Fox. Before I go on to explain why movie theaters are royally screwed by this mega-merger, here are some basic facts that are important to digest:
- Disney owns a lot of companies you didn't expect them to - ABC, ESPN, Pixar, Marvel, Lucasfilm, are just a few of the popular ones
- 21st Century Fox owns a lot of companies, some of which you expected them to, and some that might surprise you - 20th Century Fox, National Geographic, Hulu, Fox Digital Entertainment, to name a few
So collectively the two massive companies are responsible for the following:
- Movies
- The Lion King movies
- Frozen
- Toy Story movies
- Incredibles 2 (excited to see this one)
- Finding Dory
- Finding Nemo
- The Star Wars movies
- Pirates of the Caribbean movies
- News
- ABC News
- Good Morning America
- Television
- Dancing with the Stars
- Grey's Anatomy
- How to Get Away With Murder
- Desperate Housewives
- Nashville
- Scandal
- The Spider-Man TV shows
- The X-Men TV shows
- Sports
- ESPN First Take
- SportsCenter
- Sunday NFL Countdown
- College Gameday (basketball)
- Baseball Tonight
Okay, I lied.
I actually only listed what Disney was responsible for… before the merger. As you can see, Disney owns an incomprehensible amount of Movies, TV shows, News programs, and Sports shows - in short, Disney owns content. Couple this with the newly added merger of 21st century fox, which includes another set of incredibly popular TV shows like It's Always Sunny in Philadelphia or Archer or American Crime Story - you have yourself a content king.
In the past content used to work like this:
- Someone would make content
- Pay-TV companies like Comcast and DIRECTV would offer that content to you for a fixed price per month
- Channels like USA, Fox, ESPN would give you 21 minutes of content with 9 minutes of advertisements
Users started realizing that they didn't watch 80% of the channels they paid for. And so the Netflix model of no-ads, and content at your fingertips arose, which now looks like:
- Someone and Netflix would both make content
- And offer it to you for a fixed price every month
- No ads would be shown
Here's a visual on the number of cable subscribers in the US.
(not an actual graph of anything - my point being that cable subscription numbers are dropping every year) Today, Netflix has about the same number of subscribers to its service, as does the entirety of cable television in the United States. Netflix was part of the reason this decline was expedited.
Now imagine this - a secondary online service that has Movies, Television, Sports, and News, all available on your laptop, tablet or phone whenever you want.
That's what Disney's going for.
In August of 2017, Disney pulled all of its content from Netflix, and by early next year, it aims to release its own online streaming service - with shows and programs for every age and demographic from elementary school kids to fantasy football addicts (think back to the first list with everything Disney is responsible for).
Can Disney pull this off?
Well, Disney recently decided to increase its stake in BAMTech from 33% to 75%. BAMTech is infamous for its sophisticated technology and near-perfection streaming abilities for a wide variety of sports. HBO-Now, MLB, the NFL, WWE - just a few of the very many important clients that BAMTech has been serving successfully.
In short, yes. So what's in store for 2018? A Disney and Fox backed, BAMTech-supported digital streaming service for all sorts of customers. With Netflix subscription prices rising, will Disney do to Netflix, what Netflix did to cable? Is Netflix in trouble? Will the two co-exist peacefully?