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Disney-21st Century Fox and the war with Netflix over streaming

Odds are, if you're reading this story, you're a subscriber to Netflix.In two years, will you be a subscriber ...

Posted: Dec 15, 2017 7:26 PM
Updated: Dec 15, 2017 7:26 PM

Odds are, if you're reading this story, you're a subscriber to Netflix.

In two years, will you be a subscriber to Disney, too?

That's what Disney head Bob Iger hopes. In fact, that's the premise of this week's $52 billion Disney-21st Century Fox deal. Executives at the two companies are talking openly about taking on Netflix, which is a fundamental change to how Disney and Fox currently operate.

"When Disney pull all their -- and Fox -- pull their programs back, or stop selling anything to Netflix, it will be interesting how that affects them," 21st Century Fox patriarch Rupert Murdoch said Thursday.

Murdoch is basically telling Netflix "we're turning off the spigot." The Fox assets will super-charge Disney's own streaming ambitions.

Netflix has been expecting this for a long time. That's one of the reasons the streaming king is investing billions of dollars in programming, including dozens of original series and films.

Related: Bob Iger is the undisputed king of Hollywood

What's the ultimate outcome? In a few years you may be paying for Disney's streaming service and Netflix and probably a few others. Or maybe a bundle of them all -- a newfangled form of cable TV.

Thursday's P.R. blitz by Iger and Murdoch, promoting the virtues of the Disney-Fox deal, left little doubt that the deal is all about battling Netflix, Google, Facebook and other Silicon Valley giants.

The big media world buzzword right now is "DTC," short for "direct-to-consumer," meaning a product you buy directly from Disney, instead of a distributor like Comcast.

If the 21st Century Fox sale is approved by regulators, Fox's shows and movies will be building blocks for Disney's forthcoming streaming service, a key piece of Iger's "DTC" strategy.

This was a big part of the pitch to investors on Thursday: Disney said buying Fox's assets "expands our global reach" and "broadens our global direct-to-consumer capabilities."

The Disney-branded streaming service won't launch until 2019. The company is also planning to introduce an ESPN-branded sports streaming service in spring 2018.

In preparation, Disney has already said that it's not going to renew its movie distribution deal with Netflix.

Fox has also been pulling back some of its programming. Its cable channel FX has been promoting the FX+ app as an alternative to Netflix.

Of course, Netflix has been cutting huge licensing checks to media companies for almost a decade now, so this new direction comes with risks.

The cable bundle still provides most of Fox's profits, and will for the foreseeable future.

But executives like Iger and Murdoch have been talking about this streaming shift for some time. The changes in consumer behavior are obvious for all to see.

In interviews on Thursday, Murdoch described the competitive landscape in crystal clear terms.

"I think Facebook coming in, and Apple, and Netflix are all going to be big players," Murdoch said on Fox Business, one of the channels he'll still own after the Disney transaction closes.

He pointed out that Facebook tried to bid for the streaming rights to cricket matches earlier this year. Murdoch's Star media group won out.

"That was a warning shot," he said of Facebook. "They've announced now they're going to spend billions on sports rights. So we don't know which country they'll go after or what they'll do."

This is how media moguls now see the landscape: As a battlefield, with themselves lining up against tech heavyweights.

Related: White House confirms: Trump talked to Murdoch about Disney deal

This perspective also contributed to Time Warner's decision to sell to AT&T last year. (Time Warner is CNN's parent company.) The deal has been delayed due to an antitrust lawsuit by the U.S. government.

Disney and Fox will face regulatory scrutiny as well, although President Trump has already weighed in favorably about his friend Murdoch's big bet.

Disney and Fox's argument to regulators will be, in effect, that Netflix, Amazon and other players are getting bigger and bigger, so we have to be allowed to keep up.

"Most folks who don't follow this closely may not be aware of the sheer power and investment of the new entrants and how that is affecting our space," a Fox source said Thursday. The person requested anonymity to describe the looming antitrust arguments.

"Content creation is occurring in the most competitive environment in its history," the source said. "So, consolidation has to be viewed the way consumers are experiencing it."

They are increasingly experiencing it as a series of streams.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 69374

Reported Deaths: 1989
CountyConfirmedDeaths
Hinds5768121
DeSoto375331
Harrison265136
Madison248972
Jackson239145
Rankin232238
Jones194762
Forrest185857
Washington172244
Lee156342
Lauderdale143993
Neshoba130694
Lamar124115
Bolivar115636
Warren113735
Oktibbeha113639
Lowndes110240
Panola109117
Sunflower107127
Lafayette101820
Scott101720
Copiah97128
Leflore95968
Pike95137
Holmes92349
Yazoo87013
Pontotoc8579
Grenada85626
Lincoln84643
Monroe83155
Simpson82131
Leake79927
Coahoma78913
Wayne78921
Tate74630
Marshall7299
Union70017
Marion68921
Adams64226
Covington63715
Winston63516
George6038
Pearl River56740
Newton55511
Tallahatchie54711
Attala53325
Walthall51121
Chickasaw48819
Noxubee46312
Tishomingo4449
Prentiss44110
Alcorn4395
Calhoun4269
Smith41213
Claiborne40914
Hancock40915
Jasper4089
Clay40414
Itawamba39510
Tippah38814
Tunica3657
Montgomery3456
Clarke34328
Lawrence3298
Yalobusha31810
Humphreys29912
Quitman2751
Carroll26211
Greene26213
Perry2488
Webster24813
Amite2406
Jefferson Davis2406
Kemper24014
Stone2245
Wilkinson22013
Sharkey2065
Jefferson1967
Benton1541
Choctaw1384
Franklin1352
Issaquena272
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 100801

Reported Deaths: 1814
CountyConfirmedDeaths
Jefferson13463261
Mobile10671216
Montgomery6955153
Madison551035
Tuscaloosa432780
Unassigned398568
Baldwin371029
Shelby336137
Marshall319938
Lee272447
Morgan242520
Etowah219034
DeKalb185214
Calhoun182819
Elmore176739
Walker154865
Houston145013
Russell13912
Limestone137813
St. Clair137520
Dallas134725
Franklin130822
Cullman123812
Colbert122518
Lauderdale120320
Autauga118822
Escambia109417
Jackson10724
Talladega106914
Tallapoosa87679
Dale85029
Chambers84838
Chilton8279
Blount8255
Clarke82110
Coffee7796
Butler77336
Covington74621
Pike7167
Marion58726
Barbour5816
Lowndes57524
Marengo56817
Bullock49211
Hale48826
Winston45711
Bibb4535
Washington44913
Perry4464
Wilcox43610
Monroe4246
Pickens41110
Randolph40311
Conecuh39410
Sumter36618
Lawrence3563
Macon34114
Crenshaw3318
Choctaw28912
Cherokee2798
Clay2775
Geneva2652
Henry2643
Greene25311
Lamar2302
Fayette2235
Cleburne1291
Coosa1053
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