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Michael Scott

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Michael Scott majored in International Business at San Francisco State University and University of Economics, Prague. He is now working as a news editor for…

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Disney Beats Out Comcast In $71.3B Mega-Merger

Disney Comcast

Welcome to the new global entertainment monolith formed in the long-awaited and contentious $71.3-billion mega-merger of Disney and Fox—but keep this in mind: The ultimate battle for supremacy will be about streaming.

As of yesterday, Disney is the owner of 21st Century Fox, which gives Disney a handful of new Marvel superheroes, Fox Searchlight Pictures, Fox 2000 Pictures, Fox Family and Fox Animation, plus FX Networks, National Geographic Partners, and a 30-percent stake in Hulu (which, by the way, adds to the 30-percent stake Disney already had).

The acquisition also includes Fox Networks Group International, Star India and Fox’s interests in Tata Sky and Endemol Shine Group.

Disney was also trying to scoop up Sky News if Fox managed to acquire it; but in September, Comcast outbid Fox for Sky in a deal valued at over $40 billion.

So, Comcast won the Sky war, but it lost the bigger one.

In late 2017, Comcast bid $65 billion in cash for Fox’s assets, pushing Disney to up its bid to $71.3 billion and Comcast withdrew.

The next battle is on the frontline of streaming.

With the advent of streaming and the threat posed by the likes of Netflix and Amazon to traditional providers of entertainment, it’s either get bigger or lose.

NPR’s David Folkfenflik summed it up rather succinctly, says this was about “fear of the seemingly bottomless wallets of Netflix, Amazon and possibly Apple to spend on new shows; opportunity to cash out assets at a possible peak; and pragmatism in finally resolving the professional fates of Murdoch’s son, Lachlan and James, as well [as] the fortunes of four other Murdoch children who do not play a role in the company.”

And while the Netflix and Amazon threats are clear, the Apple one is only just emerging, and the timing of the closing of this merger is significant: In less than a week, Apple will launch its video streaming service, which it started in late 2017 and finished at “midnight” on Tuesday. Related: Ford CEO Gets Raise After Massive Layoff Round

Apple is planning to create an entertainment giant of its own, and is now casting its net far beyond iPhones.

Disney knows it has to roll out streaming—hard and fast. The new Disney streaming app—Disney Plus--is slated to launch this year, but there is no indication that it will combine with Hulu and ESPN, which Disney already owns. That’s makes Disney’s now-controlling stake in Hulu all the more important.

Still, Netflix is the bigger threat, and Apple can’t really disrupt its progress. And earlier this week, Netflix definitively said it would not be part of Apple’s streaming service.

Apple’s new streaming service will, of course, rival Netflix with original content, and there are also indications that it would include bundled subscriptions for news and magazines, in addition to tv shows and movies. When Apple unveils its new streaming service on March 25, Netflix won’t be there to sweeten the deal for Apple subscribers.

That’s good news for Disney, at least.

But there is an interesting twist to the potential rivalry with Apple over streaming: Disney’s CEO is Bob Iger, who also sits on the board of Apple.

By Michael Scott for Safehaven.com

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