05/04/2020 The magazine by Communication Science students of the UvA

What’s the name of the game? Disney’s emerging monopoly

As Disney’s CEO, Bob Iger, is leaving the famous entertainment company, Rita took the opportunity and looked more closely into the actual power Disney holds in the industry.

45 years in the family, 15 years as CEO. Disney’s Bob Iger is stepping down to focus on more creative aspects of the business, becoming the new executive chairman up until December 31st, 2021, when he officially will leave Walt’s empire. During his time as CEO, Iger supervised some of Disney’s greatest acquisitions, from Marvel studios all the way to 21st Century Fox. These contributed to the company’s domination of the media industry and instigated numerous debates throughout the years about violations of the antitrust–act. What better way to honour the whole new world Iger helped create, than a brief overview of Disney’s significant practices that have contributed to Monopoly suspicions?

Do you remember that game? The one you’d start playing and thinking it’d be fun, but then 4 hours later you’d find yourself fighting over a water company with a younger relative? You know, the one where you had to choose to be a shoe or a car while trying to make money from other players and avoid jail time? Yes…Monopoly!

As it turns out, the economic concept of the thrilling board game may have serious consequences in the real world. The question is, when does a corporation become a monopoly? When should it be stopped? And, how many not-so-subtle Disney references can I manage to fit into this article?

The goal of dominating the industry.

Let’s get down to business: What exactly is a monopoly?

A monopoly is defined as “control or advantage obtained by one entity over the commercial market in a specific area”.

Although there are varying types of monopolies, the basic idea of what it means for a corporation to be a monopoly is that it has the power to determine the prices of products, is able to exclude competitors, and acquires as well as maintains power with the goal of dominating the industry.

This is a legal offense, under antitrust laws, which restrain concentrations of power that affect trade and reduce economic competition.

The Empire strikes back: Disney’s acquisitions

To begin delving into the potential Monopoly power Disney may have within the media industry, it’s important to have an overview of what exactly Disney owns.

For years, Disney has openly been creating a small and comprehensive empire of copyrights, TV channels and film studios. Currently, the Walt Disney Company’s list of acquisitions includes, but is certainly not limited to:

  • Marvel Studios
  • Lucasfilm
  • 80% of ESPN
  • 50% of the History Channel
  • Pixar
  • Hollywood Records
  • 60% of Hulu
  • 21st Century Fox
  • National Geographic
  • FX
  • ABC
  • Touchstone Pictures

Last year alone, 38% of all US box office sales belonged to Disney films, which is impressive once you realise that only around 17% of their revenue directly comes from films. Under all of the acquisitions above, Disney profits from endless fan favourites ranging from Fight Club to the Titanic, Kingsman to Princess Bride or even Aliens.

So, Disney is a large corporation with an overwhelming catalogue of media content, but why should you worry?

The strange business of making dreams come true

As a famous uncle once said: “With great power, comes great responsibility”. The danger of the concentration of media content and media outlets is the power it gives Disney over any other entity in the industry. An overview of some of Disney’s most interesting approaches to the business, highlighting the dark side of the force.

An elegantly simple way to increase sales.

1. The Vault

Though currently a retired idea, due to their endeavour in streaming services, an iconic and long-lasting practice of the Walt Disney Company is the concept of trapping nostalgic classics into a “vault”.

The idea is to create a sense of artificial scarcity, encouraging consumers to buy the last copies of family favourites, before they are unavailable to the general public for an undisclosed amount of time. An elegantly simple way to increase sales.

2. The theatres

Disney’s dominance and power within the industry may be impacting the cinema business, as well as the film choices in theatres. Most cinemas currently depend on blockbusters to stay afloat. Many of these are Disney films or Disney owned franchises (like Starwars or Indiana Jones), giving Disney a large amount of power when it comes to negotiating the rights for theatres to show their films.

Not only are the requirements to show their films allegedly more demanding, but many theatres are even being denied access to classic Fox titles, known to be box office hits. Theatres which like to keep their services interesting by mixing new releases with classic ones, as well as having special Halloween or Christmas screenings, are reportedly being deprived of  Fox films, like “Home Alone”, “Die Hard” or “The Fly”. This tactic speculated to be utilized not only for bargaining power, but to ensure that there is more screen space for new Disney content.

An alternate speculation, is that this is a move to direct customers to Disney’s new streaming service: Disney +.

A threat to competitors like Netflix.

3. Disney+

Perhaps the end game, the ultimate power move in an era of streaming and binge-watching: Disney +.  The streaming service was launched in November 2019 and consists of all the Disney owned essentials, from Pixar to Marvel, and even Disney + exclusive series such as The Madalorian.

The combination of the wide range of content and franchises they own, with the economic ability to initially offer their streaming services at a loss, increases Disney’s dominance of the online media market. Disney is now a clear, direct and maybe unbeatable threat to competitors like Netflix.

So, what exactly does this all mean?

Disney’s intimidating power and market domination are undeniable but the definite consequences for the entertainment industry and its diversity are yet to be determined.

The truth is that currently, despite the clear power that Mickey and co. have, it can still be argued that sufficient competition exists. As long as Disney’s market share stays under 50%, it seems to be valid to refuse the Monopoly label.

A perfect get-out-of-jail-free card I suppose.

Cover: Skitterphoto



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