Disney Owns a Ton of Shit, and Yes, We Should Be Concerned

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If Star Wars is the analogy for Disney as a company, especially in the wake of its prospective acquisition of most of 20th Century Fox’s assets, it’s decidedly more Galactic Empire than Rebel Alliance. (Image Credit: Milli-Jane)

The Walt Disney Company was already a big deal prior to the events of the past week, but with Disney’s acquisition of most of the assets of 20th Century Fox, the corporation just became that much more monolithic. The lineup Disney now boasts in terms of the entertainment to which it has the rights is truly breathtaking, not to mention difficult to recall and enumerate. Concordant with this notion, let’s bring in Derek Thompson, editor for The Atlantic, to set the scene:

The yuletide haul includes some of the most famous properties in television and film. In the transfer of power, Disney would receive the 20th Century Fox film studio, including the independent film maestros at Fox Searchlight (Best Picture Oscar-winners include: Slumdog Millionaire, 12 Years a Slave, and Birdman), the X-Men franchise, Fox’s television production company (worldwide hits include: The Simpsons, Modern Family, and Homeland), the FX and National Geographic cable channels, and regional sports networks, including the YES Network that broadcasts New York Yankees games. Disney also acquires a majority stake in the TV product Hulu, which it may use to kickstart its entry into the streaming wars.

These additions would enrich an overflowing treasury at Disney, whose assets includes Star Wars, Marvel, Pixar, ABC, ESPN, the world’s most popular amusement parks, and, of course, its classic animated-film division. When Mufasa tells Simba in The Lion King that “everything the light touches is our kingdom,” it isn’t just memorable screenwriting. It is corporate guidance.

Movies. Television dramas. Sports and nature shows. And all that merchandise. When Thompson speaks of a “haul,” he ain’t just whistlin’ Dixie. So, what is the significance of this deal? To be fair, it depends on who you ask and about which aspect you are most concerned. First, let’s view this deal alongside other recent bids for corporate consolidation, for no mega-merger is made in a vacuum, of course. Just recently, CVS Health and Aetna, Inc. agreed to a $69 billion acquisition agreement, the prospects of which are concerning to any number of outside observers, including those worried about what the merger might mean for consumers. Then there is the proposed deal between AT&T and Time Warner, which has been challenged in court by the Justice Department. You know, not for any political reasons or anything—it’s not like President Donald Trump has had a feud with CNN that may be motivating this anti-trust challenge. The Disney-Fox merger, if it were to pass, would be the largest ever among entertainment companies. As Thompson explains, in terms of percentages, Disney would control as much as 40% of the American movie business and 40% of the U.S. television business, and potentially yet more of the sports TV landscape between ESPN and regional sports networks. As far as the rich getting richer goes, Walt Disney Co. would be like a giant cartoon octopus with its suckered arms grasping onto all sorts of revenue streams.

Derek Thompson, for his part, has a different analogy, but one that likewise reflects a sense of dread. In fact, the same article from which I’ve been pulling data and quotes alludes to it in its very title: “Everyone Should Be Very Afraid of the Disney Death Star.” As any Star Wars fan, nominal geek, or individual who has seen the first film can at least partially describe, the Death Star is a massive spherical mobile battle station armed with a super-laser capable of destroying an entire planet. Suffice to it say, then, that the DS-1 Orbital Battle Station, as it is officially designated, is indeed something to be feared. Beyond perhaps the obvious that Disney’s relative dominance in the American corporate universe makes the Death Star analogy particularly apt in light of its awe-inducing size, though, what specifically should have us shaking like the proverbial leaf?

In answering this all-important question, it makes sense to step back a bit and consider the motivations of each party in this acquisition deal. For Disney, Thompson explains, it’s about streaming content. Since 2010, in the United States, only one age group has seen an increase in watching “traditional” television: the 65+ crowd. In light of this, the future is clearly with streaming services like Netflix and other cord-cutting avenues, and for Disney to compete, it has to become big enough to have enough rights to enough content that it can hope to compare. Companies like 21st Century Fox and Time Warner, meanwhile, the prospective sellers in these purchases, see the writing on the wall when it comes to their dwindling TV ratings and unimpressive box office numbers. Rather than holding on and bracing for the inevitable job cuts to be announced and made, they’re cashing out. In the particular case of Rupert Murdoch and Fox, it will retain some assets even after Disney’s acquisition, namely FOX Broadcasting, FOX News, and various national sports networks. After all, without FOX News, where would all the angry old people go to get their politics? Shitwhat would Pres. Trump do for hours a day?

OK, now that we’ve gotten an idea of Disney’s strategy in all of this, let’s get to the implications of the move, and why people like Derek Thompson are particularly troubled by it. For Thompson, simply put, dealing with a Death Star-sized titan in the entertainment industry is going to be a nightmare for consumers, Hollywood studios, and tech companies alike. He elaborates:

If [this] sounds a little scary for television distributors, or television viewers, then good. Everybody should fear the Disney Death Star. Hollywood studios should be afraid to compete with a corporate goliath that could earn half of all domestic box office revenue in a good year. Every tech company y should be afraid to get into a content war with a company that combines the top blockbuster movie studio, with a top prestige film company, with a world-class television production company, with the most valuable franchises—Star Wars, Marvel, Pixar, and X-Men—in the world. And consumers should fear too; not just those who are afraid that Disney will water down artsy filmmaking (like Fox Searchlight’s Grand Budapest Hotel) and R-rated superhero films (like X-Men’s Deadpool), but also those who are afraid that too much control of any industry confers monopoly power that restricts choices, raises prices, and hurts workers.

In other words, with an effective monopoly on media content, or at least as part of an oligopoly among the other “goliaths” of the movie and television world, Disney would be able to throw its weight around, and the rest of us would likely have to pay a premium or risk missing out on what it has to offer. Viewing these sentiments alongside the recent FCC vote to repeal net neutrality, the public has every right to be worried access to content in the near future will come with a very high price attached.

For those reading who possess pre-existing knowledge of the Death Star, you may have initially taken issue with the notion that this monstrosity is something to be feared. With respect to its destructive capabilities, it has to be honored that the Death Star can blow shit up. This seems beyond question. In practice, if you will, however, the Galactic Empire’s spheroidal moon-sized battle station of choice doesn’t have a great track record. In the first film—and don’t get me started about which is Episode I or Episode IV; I mean the one that came out in 1977—the Death Star is taken out with a strategically placed shot by Luke Skywalker that travels down an exhaust vent and goes all the way down to the reactor core. Sure, Luke needs the Force to be able to guide his torpedoes down the shaft that sets off the critical blast, but in terms of a colossus like that being able to be brought down by the weaponry of one adversarial craft, such is a design flaw that seems particularly glaring, even for the likes of a brutal galactic regime that, as a function of being evil, is contractually obligated to underestimate the oppostion. In Return of the Jedi, a second Death Star is in the midst of construction, but doesn’t even make it to completion. The Death Star II—let’s call it—is apparently designed with a major weapons upgrade, but alas, the Rebels put the kibosh on it. Another reactor core explosion, another dead Death Star.

If these dadgum Death Stars are so easy to explode, why is Derek Thompson warning of potential danger? Well, Thompson is fully aware of the Death Star’s legacy of destructability, and based on this, he’s alarmed for Disney’s sake, too. From the article:

[H]ere’s the truly weird part: Disney should also be afraid of its own Death Star. (After all, the thing keeps getting blown up.) In the last fiscal year ending in October, Disney’s made $55 billion in revenue, with about 60 percent coming from television and film (the rest came from parks, resorts, and merchandise). That 60 percent is endangered: Box office ticket sales have been flat or declining for years, and television is in obvious structural decline. In many ways, the entire company’s future hinges on its ability to funnel its expansive universe of entertainment into a single direct-to-consumer stream that takes on Netflix, which already has more than 100 million subscribers worldwide.

To put this another way, Disney is taking a gamble that it will be able to compete with Netflix, and with the company already so reliant on revenues from an industry on the decline, not to mention already behind the curve with respect to Netflix’s legion of subscribers, it’s not an insignificant risk. So, on one side, if Disney as the Evil Empire is successful in its bid to rival or even surpass the top dogs in the streaming world, Imperial forces will be that much better able to impose their will on the consumer and content producers alike. On the other hand, if Disney fails to upend its prospective competitors, this can mean canceled projects/divisions, lost jobs, and other negative outcomes. Who or what do we root for in this situation? A draw? For the Galactic Empire and the Rebel Alliance to work out their differences, and maybe hug it out as an affirmation of their newfound bond? How likely does that seem?


Much about this deal is up in the air as far as we plebeians know, including whether or not the acquisition will make it past would-be government regulators in the first place. Reportedly, Amy Klobuchar and other congressional Democrats are requesting hearings about the Disney-Fox deal because of their concern about what this agreement might mean for consumers. Almost assuredly, there will be jobs lost as part of the takeover. Regarding the FOX Broadcast Network, there are presumptions that it will begin to be yet more sports- and news-oriented, potentially putting the future of original shows like Empire and Family Guy at risk. In the milieu of the silver screen, the acquisition of Blue Sky Studios will give Disney and Universal Studios a major leg up on any future competitors with respect to animated feature films. In the streaming worldthe very crux of this dealDisney will now own a majority stake in Hulu, but whether this service is to be improved or merely designed as a complement to a forthcoming new behemoth stream service of Disney’s design is likewise not clear. Amid all the excitement about the Marvel brand and the X-Men franchise being on the same ticket, so to speak, there is every probability that a Disney-Fox merger would result in much upheaval, and those concerned with antitrust matters are right to be wary of having so much power in the hands of one company.

With size and power, there is also the worry that Disney will use its newfound leverage to try to be a bully to the press. It’s not like there isn’t past precedent for this either. Disney banned Los Angeles Times critics from advanced screenings of Thor: Ragnarok because of the paper’s investigations into whether or not the Walt Disney Company is paying its fair share for the benefits it reaps based on its relationship with the city of Anaheim. Disney eventually reversed the ban, but not before a significant amount of media scrutiny and public outcry. This is a similar tone adopted by the Trump administration, one that views a free press as the enemy and seeks to silence or otherwise delegitimize the news media that dares to turn a critical lens on any of its misdeeds. Speaking of Trump, he happens to be a good friend of Rupert Murdoch’s, and as we know, is an avid watcher of FOX News. That the Justice Department swooped in to legally challenge the AT&T-Time Warner deal and has seemingly not met the proposed Disney-Fox merger with the same antitrust zeal is definitely bad optics, and very well may belie a streak of favoritism that already plagues the current administration.

Josh Spiegel, co-host of a Disney movie podcast and writing for /Film, shares the sense of pessimism Derek Thompson and others feel surrounding this deal, and as a Disney fan, his troubled outlook is as spiritually-minded as anything else. Using the setting of Pixar’s WALL-E as an all-too-appropriate metaphor, he writes:

A couple years after Disney bought Pixar, the animation studio released one of its best films, WALL-E. That film doesn’t spend a ton of time on describing how the remaining vestiges of the human race became so fat that they couldn’t walk around on their own two feet. We just see plenty of happy, wildly unhealthy humans rolling around on floating recliners on an outer-space cruise ship as they enjoy the spoils of what appears to be the only corporation left in humanity: Buy-n-Large. The few shots we see of abandoned BNL stores call to mind the Super Targets or Wal-Marts that appear in various metropolitan markets around the country. But BNL’s influence extends beyond the superstores of the 21st century; the last footage we see of a live-action president (played by Fred Willard) suggests that he was part of the BNL corporation as well as being a politician. By the time that WALL-E finds himself on the cruise ship Axiom, there’s no separation between BNL (referred to in a nursery overseen by robots as “your very best friend”) and any of the services offered on the ship or even the clothes the humans wear.

Disney is not at the level of BNL…yet. One of the side stories of Disney buying Fox is that its current CEO Robert Iger will extend his term at the top of the company through 2021, meaning that those pervasive rumors earlier this year about him running for President in 2020 are now moot. But it’s hard not to see some parallels between the rise of Disney over the last decade-plus (there was once a time when they didn’t even own Pixar, let alone Lucasfilm, Marvel, or Fox) and a massive conglomerate like BNL. Disney does not have superstores like the BNLs of the real world, but its products are everywhere to a point of maddening ubiquity. It’s not like Disney buying Fox would be the first time they’ve expanded their growth, but this time, it suggests something more disquieting and engulfing.

For all its cute cartoon characters and heart-warming tales, the Walt Disney Co. itself is not the underdog we traditionally like to root for in the stories it sells. It is a Goliath intent on churning out blockbusters and selling truckloads of toys, dolls, and other merchandise, and this promotes real trepidation among those who enjoy products outside the Disney vanguard. As noted, it’s troubling to fans of various programs aired on Fox, in that Fox might be envisioning a strategic shift and Disney might not have any use for them, imperiling their future. From a cinematic perspective, 20th Century Fox and Fox Searchlight have produced material that is geared toward adults and has garnered its fair share of critical praise and recognition from the Academy, but there exists the fear herein as well that their releases will become watered down, or otherwise will fail to be prioritized in Disney’s money-making enterprise. Meanwhile, in the streaming wars, who knows what a Disney-vs.-Netflix battle might look like? There is every reason to worry the relative dominance heretofore of Hulu and Netflix in the streaming market will allow them to put the squeeze on we consumers. Perhaps the existence of competing services like DirecTV Now, Sling TV, and Sony PlayStation Vue as well as the growing demand “among cord-cutters” will be strong enough to counteract such a trend. Perhaps not.

Assuming the acquisition will be allowed to pass, Disney will own even more shit than it already does. For consumers, content providers, Disney fans, and arguably the Walt Disney Company itself, this is something of which to be afraid. After all, empires fall, and even Death Stars have been known to explode from time to time.

 

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