If Walt Disney Co acquires Twenty-First Century Fox, a new competitor for Netflix Inc may emerge. The two companies have discussed the potential sale of Fox’s FX and National Geographic channels as well as its movie studio to Disney. On Tuesday, investors were selling Netflix shares bringing the stock down over 2 percent. Disney and Fox shares increased merely 1 percent each as a deal between the two will advance Disney’s planned streaming push.
“It could be very formidable,” said Bruce Tuchman, a media investor. “They wouldn’t have to leave the confines of their own company to build a competitive service.” In August, Disney announced it was removing its first-run movies from Netflix beginning in 2019 for airing only on a Disney-branded service. With Fox, Disney could remove Fox programming from Netflix as well, taking shows such as “The Simpsons” and movies like “Avatar”.
With Fox making up up 17 percent of Netflix’s top-rated shows and Disney with 7 percent, this could be a large problem for the online streamer. Disney and Fox both own about 25 percent of the streaming service Hulu, another outlet they may use to compete with Netflix. Ted Sarandos, Netflix’s chief content officer, had stated in August that the company was investing more into its own programming. In regards to licensing he said, “That’s why we got into the originals business five years ago, anticipating it may be not as easy a conversation with studios and networks”.
Disney online services comes ten years after Netflix, who has 109 million streaming customers across the globe. Disney could expand its global reach if it acquires Fox TV. Laura Martin, analyst, stated that Disney would need to purchase a film library from Fox or another large media company to compete with Netflix. “Disney’s libraries are very high quality, but they are very small,” Martin said. “They could not do it alone.”
Disney, Fox and Netflix had no comment.
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