While the acquisition of 20th Century Fox by the Walt Disney company certainly does have its “pros,” it also has its “cons.” It may finally bring the X-Men into the Marvel Cinematic Universe, but it could also hurt the entire film industry in ways that most people would never have thought twice of before. Other movie studios, theater chains, streaming services, and the DVD market could all suffer because of this merger, affecting not only the people who work in the industry, but also the average consumer.
Based on the current numbers, if the Disney-Fox merger does come into effect, then the Walt Disney Company will own 40% of the entire movie industry. While this number seems small, being less than half, it is an unprecedented number. Disney and Fox are already among the biggest players in the industry. Having them merge will double Disney’s power, making them two times larger than the second largest movie studio.
Both Disney and Fox currently have large release schedules in the next few years, with some seriously heavy hitters like Marvel movies (from both studios), Star Wars movies, Toy Story 4, the Indiana Jones sequel, the Bob’s Burgers movie, and a number of Avatar sequels. Surely, these schedules will be changed a bit once the studios merge so that each big movie is a week or two apart. With these two huge studios no longer competing, and now releasing their movies with a pattern set to make the most money, other studios like Sony and Paramount will have difficulty trying to release their movies in slots that aren’t already filled or surrounded by Disney-Fox movies.
Sooner or later, the other studios will be hurt financially by this merged powerhouse. Deadline has estimated that some of these competing studios may need to merge themselves in order to take on the sheer power of the upgraded Walt Disney Company. Simply based on this prediction, it’s very possible that Disney and Fox’s 40% control over the rest of the industry could rise significantly simply based on how much they impact their competitors, which could be incredibly problematic.
Another big issue is how the merger will affect movie theaters. Disney already pushes the limits with what they can do with theaters, charging a higher percentage for their box office revenue than any other movie studio, in addition to a number of other unprecedented demands for their larger movies. This has led to a number of smaller theater chains to not be able to screen Disney’s movies, as they would lose more money than they would make.
If Disney does the same thing with the Fox movies, then these theaters would no longer be able to play a majority of the big movies in the industry and eventually go out of business. Additionally, even the larger theater chains would lose a lot of money because nearly half of the movies released every year would charge a lot more than they have budgeted for. This would mean that theaters would either have to significantly raise their prices on tickets and concessions, or go out of business.
These premium prices would range across the entire distribution field, not just in their theatrical releases. The Blu-Ray and DVD sales of Fox movies will start to become more pricey as well, which in turn will have an effect on the entire DVD market. Furthermore, the upcoming Disney streaming service will likely feature Fox’s properties, meaning that 40% of the movie market will be made available on one streaming service. Huge players like Netflix, HBO and Amazon could be taken off the market entirely because of this, or at least have to face serious budget cuts and raised prices in order to stay alive.
While the Disney-Fox merger may seem cool because of the Marvel rights, the analysis by Deadline shows that the cons may outweigh the pros. At this point, it may be too late to stop the acquisition. We just have to hope that the Walt Disney Company does not abuse their newfound power so that consumers will be able to enjoy their movies without having to spend significant amounts of money. The movie industry is about to go through some unprecedented changes, and it will be certainly interesting to see how things progress in the coming years.