If Walt Disney Company buys some Twenty-First Century Fox businesses, it could provide a quick path for the traditional media giant to create a substantial competitor to Netflix Inc in the battle for TV and movie viewers.
The deal would reportedly transfer Fox’s movie and television production studios, along with the FX cable network and international assets like Asia’s Star TV and Europe’s Sky, into Disney’s already massive portfolio of media and entertainment assets. Most importantly, it would give Disney a 60% controlling ownership in Hulu – seen as vital to their strategy to take on Netflix for streaming eyeballs.
It would represent a huge shift of power in the industry.
Earlier this year, Disney said that it would build two Netflix-style streaming services to address structural challenges to its vast television businesses — namely that more consumers, particularly younger ones, are foregoing pricey cable subscriptions.
The two still-unnamed streaming services — one built around sports programming from ESPN, the other on Disney and Pixar movies and television shows — will be powered by BamTech, a technology company that handles direct-to-consumer video for baseball teams and HBO, among others. Disney paid $1 billion a year ago for a 33 percent stake in BamTech and recently accelerated an option to spend $1.58 billion for an additional 42 percent share.
Disney’s move online could put the company in conflict with Netflix, which will lose access to new Disney and Pixar films, and with cable providers, which pay Disney handsomely for the right to distribute ESPN and other channels. Mr. Iger said Disney had not yet talked to cable providers. He added, however, that he had “all the confidence in the world” in Disney’s ability to maintain favorable deals with them.
SOURCE: New York Times