Disney’s $71 billion merger with 21st Century Fox is official. The deal comes as Disney is set to launch its own direct-to-consumer site and seeks to take on tech giants in the battle to dominate markets for streaming content. CGTN’s Karina Huber has more.
Grossing $2.8 billion worldwide, Avatar, released in 2009, is the Fox studio’s biggest box office success. Now it belongs to Disney.
But Disney’s $71 billion acquisition of Fox, isn’t about the box office. It’s about winning the online streaming wars.
“It’s the end of the studio system in Hollywood, which is 100 years-old this year. It’s a new age. It’s all gone digital and it’s all about content,” Porter Bibb, Managing Partner at Mediatech Capital said.
The acquisition of Fox gives Disney a whole treasure trove of films and tv shows as well as a majority stake in streaming site Hulu.
The merger comes as Disney is set to launch its own direct-to-consumer site, Disney+, which will feature many of its family-friendly films.
With the help of Fox’s content, Disney hopes to go head-to-head with Amazon and Netflix.
“Netflix has seen the handwriting on the wall for quite sometime. They’ve ratcheted up their original content to get ready for this shift and I believe they will be well served by all of the moves that they’ve made, working more with Hollywood talent and diversifying to various genres to cater to as wide an audience as possible. So we expect that they will do just fine,” Tuna Amobi, senior analyst at CFRA said.
The Disney/Fox merger comes less than a year after AT&T’s $85 billion acquisition of Time Warner.
Bibb said competition is leading to attractive subscription plans for consumers. But, he said that could change.
“Once the dust settles and it’s clear who is going to run the game, whether it’s Disney, Netflix, Amazon, or whomever, then the prices are going to start to go up,” said Bibb.
Experts said Disney’s acquisition of 21st Century Fox will likely lead to even more consolidation in the industry. Apple is set to announce its streaming video plans next week, but it doesn’t own much content. So many are speculating that it, too, will be in the market to buy.