Disney Bought a Company in Debts for $66 Billion – Here’s Why
Fox Network and Disney are the undisputed champions of television entertainment but, despite having empires worth billions of dollars, the future of their companies is in jeopardy due to the increasing popularity of online entertainment services like Netflix.
Now, Disney has come up with a strategy to become the next big online entertainment provider while maintaining its standard in the world of television and cinema.
Disney Acquires Majority of Fox Network
Walt Disney Co. just announced on Thursday that it had bought several assets from 21st Century Fox Inc., including over a dozen television networks, several international distributers and 20th Century Fox film studio for $66 billion – the biggest acquisition Disney has ever made. But what most people are wondering is why Disney is buying more television networks when the future of entertainment is online.
Streaming services like Amazon and Netflix have gotten ahead of the curve, leaving cable operators worried about the future of television. Despite the decreasing popularity of television business, Disney still makes more than $20 billion every year in revenue whereas Fox makes several times more. With its newly broadened portfolio of versatile television networks, Disney is planning to use a diversification strategy to make the best of, both, online and cable entertainment.
Too Small to Survive?
Rupert Murdoch, the media mogul and CEO of News Corp who founded Fox network, spent the past 60 years of his life acquiring television networks to grow his extensive media empire and no one thought he would sell two-thirds of his most profitable assets to Disney so easily– so when the news broke, people wanted to know the motive behind this move.
Despite being one of the richest and most successful businessmen on the planet, Murdoch had made some bad investment decisions back in the day during the internet boom when News Corp acquired Myspace for $580 million. A few years later, as Facebook gained popularity, Myspace was doomed and Murdoch lost all of his money. Today, the media mogul fears that history might repeat itself with his media empire.
Disney Hoping to Become a Monopoly in the Show Business
Disney CEO, Bob Iger, says that the deal is a win-win for both him and Murdoch. Fox Entertainment Group has been able to sell off its assets at a great price whereas Disney Inc. has acquired new film, television series and sports network (ESPN) to add to its vast entertainment library. With great channels like National Geographic, Disney aims to gain an international foothold in Europe and Asia.
Furthermore, it wants to pursue the same strategy as Amazon and Netflix by giving its viewers entertainment on demand through the Disney app. It’s hard to tell if Disney will be able to succeed at managing such a large empire and if it’s new strategy to take over online entertainment will work.
Smaller media companies like Lions Gate Entertainment and AMC Networks are feeling the pressure as Disney gets closer to becoming an entertainment monopoly and are searching for deals to grow their own media assets in order to survive.
The Future of 21st Century Fox and Netflix
After selling off most of the assets, Murdoch is left with only a handful of television channels including Fox News – but the future looks uncertain for Fox News as well as the channel has been afflicted with harassment scandals that have resulted in large payouts for the victims. Disney has also cut down its budget for films after the acquisition and is planning to release only 10 films per year, mainly by Marvel and Pixar.
Wary of the incoming competition, Netflix has accelerated its efforts of creating its first ever studio in order to decrease its dependency on other networks for series. The streaming company had formerly relied on Fox and Disney as its biggest suppliers but Disney has now announced that it’ll be making films and series for its own streaming service and may not give Netflix the permission to use to them on its app.
Is Disney on its way to become a monopoly in the show business?
More in Business
Real Estate Market Unscathed after Recent Economic Dips
In the last decade, Pakistan’s realty market has undergone considerable maturity. At present, their housing economy has developed the ability to withstand...June 27, 2020
Kim and Kanye Flew in a Special European Crew to Install the Floors in Their Hidden Hills Mansion
Each time we’ve had a glimpse of the home Kim Kardashian shares with her husband Kanye West, there has always been...June 25, 2020
Arctic Ice Shrinking at Alarming Rate as Scientists Reveal Shocking Figures
The ice caps and glaciers around the world are melting at an alarming rate, making scientists extremely worried about global warming...June 22, 2020
Steven Spielberg’s Remarkable Transformation from Struggling Film Student to Hollywood’s Creative Genius
Hollywood is indeed a hotbed of celebrities, and billionaire Steven Spielberg has mastered the art of wading through the industry’s murky...June 22, 2020
Preparing for Retirement? Here’s How to Best Manage Your Finances
When financial experts advise us on savings, the one thing they never leave out is saving for retirement. Those who heed...June 21, 2020
Disney World Could Become the Highest Paying Employer in United States
Thousands of employees at Walt Disney World will vote on a historic contract which could raise their minimum wages to $15...June 21, 2020
Leonardo DiCaprio’s Generous Gift to Ecuadorian Farmers
Runa, a brand that manufactures naturally caffeinated drinks made from the Amazonian leaf guayusa, has received overwhelming support from a number...June 21, 2020
Simon Cowell Pulled a Hilarious Prank on David Williams and Won $1,000
The relationship between Simon Cowell and David Williams always promises to bring some drama whenever Britain’s Got Talent is on. The...June 20, 2020
3 of the Top 4 Economies Suffering as Global Slowdown Effects Rippling Internationally!
There is a global economic slowdown, and it could be making its way to the United States sooner than you think....June 20, 2020