OPINION: Disney/Fox merger shifts film industry

By Alejandro Ambriz

On Wednesday, March 20, 2019, Disney’s 71.3 billion dollar purchase of the film and TV assets held by 21st Century Fox was officially complete. 

Notable assets acquired are Fox film and TV studio, FX, National Geographic channels, Star India, and 30 percent of Hulu.  

There are two ways to look at the situation. The first is the much anticipated access Disney-owned Marvel studios will gain to the X-Men and Fantastic Four characters. Considering how well Marvel makes movies, and how questionable some of the Fantastic Four and X-Men films have been, this merger likely sounds great. With April’s ‘Endgame,’ Marvel will need new movies to sustain itself. 

The other side of the coin is a disappointing, but expected, effect of the merger.Analysts believe this move will force smaller studios to merge as they scramble to compete with the massive studio which now also owns the “Simpsons” franchise. Lay-offs are expected of course. Disney CEO Bob Iger spoke about a $2 billion in annual cost savings by 2021, and much of that is presumed to come by way of layoffs. Disney never clarified how many people would lose their jobs. Analysts say that 4,000 of the current jobs would be lost due to the merger. What happens to the movie industry after this massive and record-breaking deal? 

Essentially, what’s been happening for a few years already: an oligopoly, a state of limited competition in which the market is shared by a small number of sellers. 

Warner Bros, Universal, Sony, and Paramount are among the other few dominating the movie industry. Disney will face issues spacing out its abundance of films in a manner that will provide each a shot of financial success. In addition to this, there is content from Fox that doesn’t necessarily fit Disney’s brand. This content is not in line with Disney’s more kid centric content. Disney is in control of films and shows that are adored by many people. Yet a healthy fan following does not always translate into profits. And Disney has shown that it generally wants to use brands to continue making money. 

Rarely straining for much else, the studio aims for money makers like movies from  Marvel, Star Wars, or animated films. 

Disney can choose to let Fox make movies aimed at a wide variety of audiences, understanding that it will be taking some losses on those films. Conversely Disney can  also push Fox into the same box as its subsidiaries. That position being for Fox to be responsible for a number of films each year ensuring each one makes the money that is expected from it. Media consolidation has become more of a problem in recent years and this merger doesn’t do much to help it. 

Cinematically, it presents and opportunity for a reunion of Marvel characters and revamped films. But there is a danger of saturation of content as the release dates for films from both Disney and Fox begin to collide. 

Disney will have to decide which direction it will want Fox to go after this monumental merger. 

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