The Disney/Fox Merger: Problems With a Monopoly

Ever since the Disney/Fox merger was rumored in late 2017, everyone I knew was ecstatic. The anticipation for the X-Men to be introduced into the Marvel Cinematic Universe and for Disney to revitalize old franchises like they did with Star Wars was unmatched. Nobody could fathom the limitations of what could be put onto the silver screen for audiences to enjoy. However, I was not one of those people. The acquisition was completed on March 20th, 2019, and I immediately dreaded what would come next. This merger was not only an open door for infinite creative possibilities, but the beginning of a monopoly over the film industry.

 

Disney does not have complete control over the industry, but they own the majority of the market. There are still plenty of successful studios that are not owned by Disney, such as Sony and Warner Bros. Studios. However, some of their other studio acquisitions include Marvel, LucasFilm and Pixar, all of which are major cash cows at the box office. Both LucasFilm and Marvel Studios released movies that have been the highest national grossing film of all time (Star Wars: The Force Awakens and Avengers: Endgame respectively) while Pixar has released four of the ten highest grossing animated films of all time (Incredibles 2, Toy Story 3, Finding Dory and Finding Nemo). These examples are not even including Disney’s original studio projects, all of which accumulates to their massive share in the market. In 2018, Disney’s box office market share was 26%, the highest out of all its competitors by almost ten percent. Warner Bros. was behind Disney with 16.3%, followed by Universal with 14.9% and then Sony/Columbia with 10.9%. It is also important to note that Disney only put out ten films last year, while Warner Bros. released thirty-eight, Universal released twenty-one and Sony/Columbia released twenty-three. Disney is completely dominating the market and only releasing about a fourth of what its biggest competitor is releasing. This is primarily due to brand recognition. Box office results show that audiences are much more likely to see sequels/remakes of their favorite properties, most of which Disney owns. They may not own the film industry, but Disney only has to release a few films each year to maintain their share of the box office. Now, after Disney acquired the fifth leading studio of last year (20th Century Fox owned 9.1% of the market and released twelve films last year), other studios are going to struggle even more trying to keep up with this monster competitor.

 

Post-Fox acquisition Disney is certainly beginning to have its effect on the world. The easiest example is the Marvel/Sony dispute over Spider-Man. The deal following the rights of the famous superhero began in 2015. After the negative ratings following The Amazing Spider-Man 2, Sony agreed to lend Marvel the character for their own filmmaking, but the deal came with an asterisk. According to Steven Zeitchik of The Washington Post, the agreement was that “[Marvel Studios’ Kevin] Feige would guide Sony’s films, using his muscle and the flex of the whole Marvel cinematic universe. Disney would get merchandising revenue and the chance to use the popular Spider-Man in its own movies. And Sony, which would be releasing the films, would benefit from the promotion that came from appearances in another studio’s blockbusters — oh, and from the involvement of Feige, who has made magic on Marvel films to the tune of $23 billion” (Zeitchik). Everything was going well, including the newest Spider-Man film making over 1.1 billion dollars this summer. However, in the past few weeks, Marvel and Sony ended their deal because Disney wanted to be a full partner and have a 50/50 split. Unfortunately, Sony was not tolerant of this idea. Disney, being the major conglomerate that it is now, had to decide whether or not it was worth it financially to be a part of a film series where they were not making a majority of the money. It’s easy to make Sony look like the bad guy for not agreeing to Disney’s terms, but at the same time it seems a bit greedy for Disney to be asking for so much money when they have almost complete dominance of the market. Spider-Man is Sony’s largest property, so it makes sense that they would not agree to 50/50 rights with Disney (who owns 95% of the Marvel Comics characters).

 

While job losses, film cancellations and studio deal endings have become rampant in this new post Disney/Fox merger, another issue has recently presented problems of its own. Disney has decided to pull the 20th Century Fox films from being streamed at local independent theaters, which will drastically impact their sales. Many smaller theaters rely on airing older films alongside the independent releases they air in their theaters. This allows audiences to choose the smaller theater and become enticed by their offerings. However, that option seems to no longer be available due to Disney pulling these films from these small theaters, only wanting their large releases to be played. An anonymous first-run exhibitor commented by saying “this is on the heels of Disney themselves preventing most of their great movies from being shown in first run theatres. In the age of streaming, this is the place that families and children, friends and fellow lovers of great movies can see them in the way the producers, directors, actors, screenwriters and all of the artists it takes to make a movie originally intended. It is deeply unfortunate that movie theaters will be denied the opportunity to share the joy of movies in a bonding communal setting.” By refusing to allow older Fox films to be shown in theaters, Disney is shutting down a large part of these smaller theaters in favor of their big releases.

 

Even though expansion for business is seen in a positive light, is overexpansion of a business problematic? Personally, I think so. Disney is getting larger, and the larger they get the more powerful they become. As much as I like Disney movies, I also like my entertainment sources to be varied. The more properties Disney owns, the harder it will be to keep the originality that makes film such a special medium. This is already seen in deals with Sony and smaller theaters that want to air old Fox films. It is important for competitors to exist in the market, or else product quality will go down. In the worst case scenario, poor product quality could cause the market to fail completely.

 

Sources:

https://www.boxofficemojo.com/studio/?view=company&view2=yearly&yr=2018&p=.htm

https://disneynews.us/important-disney-acquisitions-time-disney-history/

https://screenrant.com/highest-grossing-animated-movies-ever/

https://www.washingtonpost.com/business/2019/08/23/behind-scenes-disney-sony-fight-spider-man/?noredirect=on

https://www.indiewire.com/2019/09/disney-classic-fox-library-repertory-bookings-1202170485/

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