“With all six stones, I can simply snap my fingers, they would all cease to exist.” Disney made a strong push forward into their growing media empire with its purchase of Fox in March 2019, one of the biggest media mergers to date. This merger gives Disney access to movies and television shows including X-Men, Avatar, and the Simpsons. Some might say that this deal completes Disney’s own set of six stones, like Thanos from their box office hit Avengers: Infinity Wars. With their top six companies acquired including ABC Television Group, ESPN, Pixar, Lucasfilm, Marvel Entertainment, and now Fox. Unfortunately, like the soul stone, acquiring Fox does come with a cost. Blending two completely different corporate cultures may prove more difficult then on paper. Fox has multiple top executives who get paid nearly 20% more then their Disney counterparts. Deciding who will stay and in what position could lead to significant layoffs. Disney will also need to consider this difference in their brands, as Disney focuses on wholesome, family-friendly shows and Fox is willing to dip into the R-rated Deadpool market.
But this cost will only buy Disney competitors time and will eventually cause major impacts on popular streaming networks like Netflix and Hulu, along with other forms of media. With the purchase of Fox, Disney not only has more entertainment to offer but will also have a controlling stake in Hulu. This may mean an end for Hulu as Disney promotes the launch date of their own streaming site in November 2019. Netflix will also take a hit if Disney decides to pull their content. Controlling the market has many levels to it and Disney does not need to buy everyone out.
With their price being nearly half of Netflix, it will certainly help Disney play catch-up in the online streaming arena. Predatory pricing is not uncommon with companies as large as Disney. Walmart, Uber, and Amazon have all been suspected and even charged with predatory pricing. In a country like the United States, the law tries to support the consumer and the undercutting of prices can appear positive on the surface. But this may come back to haunt consumers as Disney knocks out competitors and will have more freedom to raise prices down the road.
To keep the threat at bay, antitrust regulators from around the word have required Disney to release ownership of Fox Sports, a stake in A+E Networks, and added stipulations to National Geographic and Nat Geo Wild channels. It’s not only Hollywood and the United States who were worried about the growing Titan, other countries were responsible for these requirements as well. We have fallen in love with Disney characters, but it is important to look at the effects this will likely have on the entertainment industry. Consumers will have to wait and see what Disney’s Endgame might be.
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Bradley, B. (2019, Apr 13). Cord Cutting News: Disney Releases Pricing, Release Date, Lineup. Retrieved from https://www.komando.com/happening-now/561404/cord-cutting-news-disney-releases-pricing-release-date-lineup
Market Business News (n.d.). What is Predatory Pricing? Definition and Examples. Retrieved from https://marketbusinessnews.com/financial-glossary/predatory-pricing-definition-meaning/
VanDerWerff, T. (2019, Mar 20). Here’s What Disney Owns After the Massive Disney/Fox Merger. Retrieved from https://www.vox.com/culture/2019/3/20/18273477/disney-fox-merger-deal-details-marvel-x-men
Jacyn Dawes is a Graduate Assistant at the Gwartney Institute and an MBA student at Ottawa University
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