As of March 2019, Hollywood’s six major production studios have been whittled down to five. The Walt Disney Company paid $71.3 billion to purchase most of the film and TV assets of 21st Century Fox, effectively changing today’s entertainment landscape.
With the merger, Disney has added Fox’s vast catalog of movies and television shows to its existing roster, which already includes Pixar, the Marvel cinematic universe (MCU), and Star Wars, which Disney acquired in 2012 at a cost of $4.05 billion. The acquisition of Star Wars resulted in a slew of new blockbuster films, and the Disney-Fox merger could bring similar results. The MCU is whole again, as Fox held the rights to successful Marvel vehicles including X-Men and Deadpool. Now, the entire MCU is in the hands of Disney.
Other changes are in store for the entertainment behemoth, not all of them positive. As Disney consolidates its properties, for instance, thousands of employees may be laid off, reports NPR. And the merger is also set to impact the realm of streaming services. Disney acquired Fox’s 30 percent share of Hulu, bringing its total share of the streaming service to 60 percent.
Further, fewer movie studios mean that independent filmmakers may have a more difficult time getting their films made, effectively thinning the entertainment landscape. In the current era of endless remakes and sequels, will audiences ultimately see even less entertainment variety in the wake of the Disney-Fox merger? Only time will tell, but major company mergers often result in profound industry changes.
How Mergers Can Alter Daily Life
The merging of major corporations may seem like an insignificant event in the scheme of things, but mergers can have a major impact on people’s day-to-day lives. In fact, many modern mergers have changed the way we communicate, shop, and even take care of our health needs.
Take Facebook, for example. Since 2010, Facebook has acquired a variety of companies in order to retain its status as a social media giant. Many of those acquisitions were integrated into Facebook’s existing platform, while others simply helped fill the company’s pockets. Facebook developed its independent messaging app after acquiring Beluga for $68 million in 2011, which changed the way people communicate.
And Facebook’s acquisitions are likely to impact social media well into the future. In 2014, the company purchased Oculus, a virtual reality gaming company, for $2 billion, with hopes to integrate VR technology into the communications industry. VR tech has yet to make a big splash in the realm of social media, but its implications are far-reaching, much like the inherent possibilities of the Disney-Fox merger.
Major Company Mergers in Recent Years
In some ways, the world is shrinking, and company mergers are at the forefront of the phenomenon. Facebook and Disney aren’t the only companies who have cultivated major mergers and acquisitions in recent years.
The merging of entertainment companies is nothing new. In 2017, AT&T joined forces with Time Warner, in a pairing that resulted in a giant company with “control over how the majority of the American public shares and consumes information and entertainment,” reports The George Washington University School of Business. And that unprecedented control is not necessarily a positive change: Critics of the $85.4 billion merger fear that its regional monopolies will lead to fewer innovations and product improvements, as well as poor customer service.
Also in 2017, Amazon finalized its $13.7 billion purchase of Whole Foods, opening up a new avenue of online grocery shopping. Whole Foods brands, previously only available in brick-and-mortar stores, are now offered online via Amazon. The merger also helped Amazon expand its offerings, such as AmazonFresh and Prime Pantry. The online grocery shopping experience is more streamlined than ever thanks to the Amazon-Whole Foods partnership.
The Future of Disney
While it will take some time before we see the full impact of the Fox-Disney merger, what is clear is that Hollywood has been drastically altered. Disney is now poised to take on the video streaming market, which is expected to reach more than $124 billion by 2025, according to MarketWatch. Hulu is a “major player” within that expanding market.
Along with its majority share of Hulu, Disney is planning to launch its own streaming platform, Disney+, in late 2019. As the company owns a number of blockbuster franchises, Disney+ is likely to be extremely popular, especially among younger audiences, which is Disney’s core group of viewers.
Disney’s family-friendly appeal puts an interesting spin on its merger with Fox, especially where a certain foul-mouthed superhero is concerned. The charismatic anti-hero Deadpool now belongs to Disney, and the company has already announced plans to continue the lucrative franchise. Both Deadpool movies have raked in more than $780 million apiece, and Disney can’t afford to ignore those numbers. The key to marketing future Deadpool movies, according to Disney executives, is ensuring a clear division between R-rated and family-friendly offerings.
Many details of the merger still remain unclear, but former Fox holdings have already been added to Disney’s corporate website, including The Simpsons and 2009’s Avatar, the highest-grossing film of all time. Disney seems poised to kick of the next chapter of its life with a bang, with Avatar sequels already in the works, and audiences must wait and see how the Disney-Fox merger will ultimately impact the entertainment industry.