Disney Acquires fox: are they a 21st Century Monopoly?

Featured photo by Travis Gergen

Everyone has a favourite childhood memory. It could have been a holiday, it could have been a film, it could have even been a child’s first action figure. Considering how diverse the planet is it’s truly amazing that a sizeable chunk of these memories are most likely all connected to one man. Walter Elias Disney. Walt was arguably the most important person in popular culture to have ever lived. The Disney Brothers Cartoon Studio (now called The Walt Disney Company) brought huge technological advances into the entertainment industry to bring joy to many childhoods in the past, present and future. Classics like Toy Story, The Lion King and Cinderella have really cemented the company as the land of magic and fairy tales. Disney was everywhere.

But why is Disney everywhere? The simple answer is that they buy everything; Lucasfilm, Marvel, ESPN, The Muppets (from Jim Henson Productions) and most recently 21st Century Fox; which now makes them the owners of Avatar and the Simpsons. Disney’s ideas appear to have got less and less original recently, if you have a look at what films Disney is making along with recent releases you can see a pattern. Cars 3, Finding Dory, Incredibles 2, Frozen 2, Wreck-It-Ralph 2. They’re all sequels, they all use hype and familiar faces to boost marketing.

From founding to death (1923-1966) Walt run nearly all of the company. Many people who knew him said that he had a split personality and a video titled “The Two Sides of Walt Disney” (by the WSJ) gives light on those two personas. Walt understood his two sides and once told a friend “I’m not Walt Disney, I do a lot of things Walt Disney wouldn’t do. I drink, Walt Disney Does not, I smoke, Walt Disney does not.” The tentative and warm side of Walt was very effective for the face of the company and his cold and powerful side was great for internal quality and leadership.

Nowadays, the business is much more different. No one with the Disney name works at the company anymore and big corporate changes have been made. The most controversial change was to scrap the words “Walt” and “Pictures” from their cinematic introductions and just stick with “Disney”. The change was first seen on the 2011 Muppets film and many believed it was a way to eliminate the man himself. CEO Bob Iger hasn’t released any official reason but the theories stretch from a simple rebrand, to “Disney” being easier to read on a small screen i.e. a phone. The company is changing. It’s whether that change is for good or for bad which is important.

To understand the issue, some business knowledge is needed. When different companies sell similar products this causes competition. Competition is good for consumers as it means the business works harder. They are more thoughtful about price and the quality as they don’t want to lose any customers. The problem arises when one company becomes too big and starts to buy out competitors. If this happens, it can often cause a cartel where a handful of huge businesses take over. This stops new entrants, stops a need for competitiveness, and stops a company standing out. In short, quality for the consumer decreases on every level while profits for the business soar.

The larger the market share, the less competition can flourish. The CSIMarket report for Q3 of 2017 shows just how big Disney is, they are never thought of as a toy maker but their market share is bigger than Hasbro’s and not too far behind Mattel (the creators of Barbie). They also own 25% of the theme park share, which means around a quarter of all money generated from theme parks worldwide is at Disney Parks.

All of this business change is scary, not just for other companies but for consumers too. What does the size of Disney mean for the future of entertainment? Will original ideas be forgotten because they will not create as much money as reboots? Will the art of media, film and pop culture be lost in the world of numbers and offices? On one hand Disney is doing a great job with its assets, Marvel and Lucasfilm still feel kind of seperate. On the other hand, these could turn into easy cash cows for the company to keep rebooting and not extending their true creative ability.

Surprisingly, this change seems to be going unnoticed to the vast majority. A twitter poll suggested that 43% of people still saw Disney as a “Magical” company and 60% didn’t even notice the removal of “Walt” from the opening titles. It appears that the goal of the current CEO Bob Iger is to acquire as much as they can. Ever since the company come under the leadership of Iger it has completed acquisition of Pixar, Marvel, Lucasfilm and 21st Century Fox.

On WDW Radio (Run by Lou Mongello) Iger stated that buying 21st Century Fox will aid “increasing consumer demand for a rich diversity of entertainment experiences”. Iger also added that the deal will “substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world”.

While Iger has a point, it’s still refreshing and interesting to see new ideas. Yet the company’s biggest downfall with branding is at their parks. Beautiful rides have been torn down to make way for new movie themed rides. Gone are the days of innovations such as Space Mountain and Tower of Terror (which was taken down for a Guardians of the Galaxy Ride). Now Disney favours more technological innovation such as complicated animatronics which are still stunning, but the fact they are branded reminds many they’re just inside a moving film advertisement.

The sheer size and strength of the Disney company is taking its toll on competitors. Whilst Universal Pictures continues to thrive, studios such as Paramount are struggling to keep up. Paramount posted a $120m loss in its Ben-Hur film and lost around $50m for Zoolander 2. Guardian writer Mark Sweeney called these losses a “string of flops” and stated that Paramount have looked at Disney’s business model to recover. Disney started the trend for physical attractions from entertainment companies, Universal, Warner Brothers and Nickelodeon have followed suit. Paramount are now set to join this list with their UK theme park set to open in 2022, but even with this expansion Disney still owns a 25% market share in this field.

So whilst Disney fills our hearts with warmth and colour, what’s going on behind the dark grey doors of the director’s office? Whatever Disney is doing they seem to be doing it well enough to make it sustainable. But fears for variety and originality are still very real. Hiding all Disney branding doesn’t mean any less money goes to them. The top two grossing films of the year; Star Wars Episode VIII and Beauty and the Beast are both from the same company. We like choice as a consumer and some of us choose not to support certain businesses by staying away from them. But with the size of companies rising and the variation decreasing. How long will this last?

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