The mega media mergers of Disney and Fox and Comcast and Sky have bolstered the two companies’ content holdings and positioned them to compete effectively with online video providers, such as Netflix and Amazon Prime, according to a new analysis from media analyst firm Ampere Analysis.
Following the mergers, two of every $10 spent on content worldwide and four of every $10 in the United States will be accounted for by Comcast/Sky and Disney/Fox, according to the firm.
Together, the two merged companies will account for $43 billion spent on content this year with Disney/Fox spending $22 billion on originated and acquired content and Comcast/Sky spending $21 billion.
While online video platforms, such as Netflix and Amazon Prime, continue to be content juggernauts with Netflix on track to spend $8 billion on content this year, the mergers of these traditional content sources have reshuffled the deck when it comes to market power.
“Prior to the recent mergers, Netflix was on course to catch and overtake the top Hollywood studios by content spend,” says Daniel Gadner, analyst at Ampere Analysis. “However, in light of the two new combined entities, Netflix would now need to triple spend to achieve this feat.”
The mergers strengthen to position of both Disney/Fox and Comcast/Sky in the global market and protects them against the rising power of online video, he adds. By executing the mergers, both have increased their libraries of original content, which they can exploit as part of their direct-to-consumer strategies.
Disney already has indicated it will go direct to consumer and pull the plug on licensing content to Netflix. The addition of Fox will make the offering even stronger, says Gadher.
For independent producers, the consolidation will mean less competition for rights, which “inevitably will impact the indie sector’s ability to negotiate favorable deals,” he adds. — TV Technology