In class, we covered the discussions between horizontally and vertically integrated MNC’s, but I wanted to take a special look at a conglomerate that recently grew enormously in size due to a recent acquisition.
The Walt Disney Company recently acquired 20th Century Fox, including their film and television studies, various stakes in different international networks and the streaming service Hulu. While some politicians have praised the merger, others have come out staunchly against it, stating that “threatens to put control of even more television, movie, and news content into the hands of a single media giant” (Variety, 2017). Disney’s acquisition of this company has resulted in their status as the largest media conglomerate in the world.
Disney’s status as a media mogul is a hot topic of conversation and a clear example of the ability for MNCs to internalize competition rather than directly conflict with them (Spero and Hart, 1997). Aside from 21st Century Fox’s status as a rival, it also held notable items that would’ve strengthened Disney’s future media plans. With the recent jump toward streaming services, Disney required a large repertoire that would draw consumers from standards like Hulu and Netflix, before the acquisition, Disney branded media would’ve barely sweetened the deal. Now, Fox television, ABC, and Disney television all are under the control of a single corporation, with significant discretion for their ability to restrict or permit what can be shown. Disney+, a recently announced streaming service designed to be a competitor to Netflix, will receive a significant boost in content from this acquisition, borrowing greatly from Hulu’s library of family oriented content. When supplemented with various additions of original content, Disney+ will be a strong competitor in streaming services, an arena that are previously seen as difficult for media companies to rival tech companies like Netflix.
Disney’s ability now to influence media in the United States and beyond is potentially problematic given their ability to influence or steer industry forces based on what interests are held. With over 39% in theatrical market share forecasted for following their merger, smaller films and directors may begin to be crowded out of the market, as the sheer size of their operations strangle existing studios (Variety, 2017). Theatres already feel the significant burden that is accommodating Disney films however their retaining of studies such as Fox Searchlight point to the inclusion of smaller directors in these larger corporations.
Disney began as “Laugh-O-Gram”, however with their substantial marketshare and limited debts, they’re laughing now.
Spero, Joan, and Jeffery Hart. The Multinational Corporation and the Issue of Management. New York, NY: St. Martin’s, 1997.
Johnson, T. (2017, December 15). Disney-Fox Deal Lands at Uncertain Time for Antitrust Enforcement. Retrieved March 17, 2019, from https://variety.com/2017/politics/news/disney-fox-deal-antitrust-enforcement-1202637338/