It’s a whole new world, but not the one Aladdin and Jasmine are singing about.
At a price tag of $71.3 billion, the Disney-Fox merger was made official March 20. The acquisition expands Disney’s content library, absorbing properties such as “X-Men” and “The Simpsons” into their sphere.
With Disney already a powerhouse, many might see the coalescence of these two media giants resulting in a dominating force. And it’s true that Fox will no longer be a competitor to Disney at the box office.
But streaming is the present and the future.
Also a part of the merger, Disney obtained a controlling stake in the streaming service Hulu and has plans to launch a streaming service of their own later this year, Disney+.
In capitalism, competition can be beneficial to consumers often driving better quality products at affordable prices.
At a glance, the Disney-Fox marriage could be seen as anti-competition. However, regulatory bodies in the U.S. and across the world had to approve the merger.
Disney didn’t acquire the Fox broadcast, Fox News and Fox Sports channels. A decision that makes a lot of sense as it keeps Disney from owning two broadcast stations and further expanding into sports as they already own ESPN.
It could mean an increase in their control over the movie theater industry, but major Hollywood studios already have a lot of control, which leaves them able to dictate the terms for who they allow to screen movies.
Maybe movie theaters will be around for a long time, but studios like Disney have to keep up with the trends, including the trend of younger generations consuming more and more content via streaming.
And that really has been the goal with the merger all along.
Acquiring Fox’s properties means Disney has beefed up their content library to make sure when Disney+ launches it can stand a fighting chance against services like Netflix and Amazon Prime.
Trends have shifted before, such as Blockbuster going the way of the dinosaur against then-emerging Netflix.
The smart move for any giant media corporation is to look at how they can leverage their content and grab a foothold in the realm of streaming.
Ultimately, this will create competition. However, it’ll be in the streaming service market, not the movie theater market.
Netflix has produced many originals and has proven that movies don’t need a traditional theater release. Its film, “Roma,” took home three Academy Awards and seven more nominations.
Cultural shifts can also mean market shifts. Audiences may feel less compelled to make it out to opening night when alternatives are presented from the comfort of their own home.
The merger is not without its drawbacks though. As Disney transitions, layoffs are leaving some of their employees looking for a new job.
Consumer benefits also remain to be seen. When Disney+ launches, if competitively priced, it will still be a new subscription to pay for those who will want to keep their current services.
New services mean content is further fragmented in more accounts and subscriptions. Convenience is a driving factor to the consumer experience, and any service trying to break into the market should be aware of that.
While comic-book-hero fans are excited at the possibility of combining the Marvel universes, the merger largely leaves the average person unaffected, at least in the short term.
For now though, hold your breath and keep your eyes open and see where this magic carpet ride goes.