Text | Joe Nocer Bloomberg columnist, who has written business columns for Mr. Fashion, GQ and The New York Times, and former editor of Fortune.
All the while, the rumor about Disney and the 21st Century Fox deal has come to an end: Disney will acquire most of the core entertainment assets of 21st-century Fox for about $ 52.4 billion, which is also an entertainment media in a rapid merger Industry, the latest case of integration.It is reported that Disney will be the movie studio, British Sky Television 39% of the shares, FX and National Geographic cable channels, a number of regional sports cable channels and streaming media services Hulu's controlling stake.
Before the Disney official announcement of the acquisition on December 14, the consolidation was generally optimistic both inside and outside the industry. Daniel Ives, head of technology research at Wall Street consultancy GBH Insights, described his clients coming this time The pretty 'home run' will create a 'go-ahead, unprecedented strength Disney' in the next couple of years; the New York Times thinks it will make Disney a better player in the world of streaming media services Ambitious upheaval is bound to threaten Silicon Valley aspirations of the entertainment industry, but also will promote the further consolidation of the Hollywood movie '; Bloomberg senior media / network analyst Paul Sweeney (Paul Sweeney) that this will be the Disney CEO Iger also extended his contract until 2021 in a bid to oversee the eventual deployment of the acquired Fox assets, according to Robert Iger.
Of course I do not want to be a target, but Iger had better be cautious, and in my opinion, if I did, I'm afraid he would be considered Gerald Levin second, the Time Warner predecessor The CEO chose the wrong merger partner (AOL) at the wrong time of 2000 (two months before the dotcom bubble burst), turning one of the most failed deals ever.
Disney will buy Fox as a powerful weapon against Netflix.Because of Disney and Pixar movie together, then Fox's "The Simpsons", "Homeland Security" and other animations, episode content blessing, put it into a unified stream Media applications, there will be a similar base with Netflix, Amazon combat.
However, I am quite skeptical of this.First, Netflix and Amazon have the first mover advantage, has long been in the content attention and avant-garde technology leader, Disney if you want to catch up will face many difficulties and pressures; Second, Disney acquired most of the assets are Is a cable TV, which is Disney has always been unwilling to give up the business.
'The purchase of Fox and Sky TV stuck Disney to the old path of development,' said Rich Greenfield, an analyst at Hongqiao Trust and Investment Group in the United States. 'Because its holdings of online assets Closely linked to the past ecosystems. "For example, Disney has been successfully verified one of the strategies is to consult with cable distributors after its network, including ESPN, ABC and Disney, packaging and sale.This led Disney to occupy The absolute superiority of price as it sells the most important elements of cable TV urgently needed.In the short term, the purchase of Fox will further consolidate Disney's price advantage and at the same time may help increase its revenue.
But in the longer term, as more and more users no longer watch cable television, sitting on those resources could even become a heavy burden.
The most commercial point of Disney and Fox acquisitions comes when the merger of two movie studios, such a merger will save money (and in fact Disney did not even want so much Fox Studios), Disney has To the 21st Century Fox's massive film resources ownership, thereby enhancing the control of the theater.
However, it is worth noting that as a result, Disney may have overshadowed its influence and will control up to 40% of its movie business once the acquisition is completed. This is not surprising whether the US Department of Justice antitrust department will ask Disney to sell Part of the movie assets, to weaken its control of the theater it? Reference AT & T acquisition of Time Warner among the objections of the Justice Department, I think the answer is very obvious .Department of Justice is bound to stop the acquisition proposal, at least against the two films The merger.
Anyway, what really made me wonder what Disney is really thinking about is a takeover part of cable TV. Think about Disney's current streaming strategy. A large number of users gave up once-used ESPN ESPN as a countermeasure and Disney announced Will launch a streaming version of ESPN for users who do not use cable television by spring of next year. Disney will also withdraw all current movie and TV content licensed under Netflix and place it on its streaming service platform, which is expected to be officially operational by 2019 , And pay a fee in the form of monthly payment.
But there's one more crucial question here: is Disney going to distribute content on cable to streaming media platforms too? With the backing of Disney and Pixar Pictures, everyone is likely to register as a new platform user, but Will it put "The Americans" or other FX shows that are still on the air? If the answer is no, then the popularity of the new Disney platform may be compromised.
As for the forthcoming ESPN app, I'm concerned about the quality of sports on the platform if it does not run those shows on the ESPN cable channel, replacing Monday Night Football with the Colgate VS Bucknell Basketball "Texas Tech vs Mississippi University Volleyball Substitution Atlantic League basketball game? How many fans are willing to pay?
The core problem is that Iger tried to solve one of the two contradictory issues at one time .He would like to Disney as a streaming media camp carry flag army, want to seize the once profitable cable television. Disney's acquisition of Fox did not move at all For example, Fox's cable channel FX requires its App users to subscribe to the TV before they can use it, and if that does not change, Disney is likely to lose out like the lost ESPN subscribers FX's user base.
As for Hulu, it is unclear what Disney can do without Comcast, which owns 30% of Hulu, after all. It is unlikely to threaten the development of Netflix with Hulu.
It may take quite some time before it disappears, but until the vast majority of television viewers get the content they need from streaming media platforms, there is a day when cable TV is dead. Disney has a great deal of premium content , No doubt that this can help it against Netflix, but I really want to see this Rush scene, Iger can not just stare at short-term revenue and market share, but also determined to break through the difficulties.As the analyst Greenfield sent a letter to customers Written by:
Instead of continuing to spend $ 6 to $ 8 billion annually on aggressive acquisitions of shares, why not stop buying back shares and take a more meaningful approach to putting money into direct-to-consumer services? If Iger is really a great CEO, we believe he will not worry about how investors think, not afraid of short-term pain before the change, but to break through the hardship to invest in content, to create a powerful direct-to-consumer streaming platform, all the new content and The value resources on radio / cable converge.
In other words, if Iger really find a way out for Disney, the most should not spend money on the acquisition is Fox, or that sentence, the wrong time to make the wrong decision.
Translation: Liu Xin