Articles, Blog

Should Disney Be Broken Up?

January 29, 2020


Disney may be violating the bedrock of U.S.
antitrust law. You’re watching FutureNow, videos about
the future of tech and society. In 1948, the U.S. Supreme Court made a landmark
decision that changed the movie industry forever, in a 7-1 vote in the case United States v.
Paramount Pictures Inc. the Court ruled that movie studios could no longer own and control
the theatres in which their films were shown. Up to this point, in an era known as Hollywood’s
Golden Age, the major movie studios were completely vertically integrated, they created the films
in their own lots with writers, directors, editors, etc. that were all under contract
with them, processed and created the movie prints, and owned the distribution through
the theaters that were only allowed to show a particular studio’s films. Imagine having to go to one theater to watch
the new Star Wars film and a different theater if you want to watch the latest scary movie
from BlumHouse. But, wait this sounds kinda familiar, doesn’t
it? That’s basically the business pitch behind
Disney+. If you want to watch the Mandalorian to be
a part of the Baby Yoda hype or watch Disney’s extensive catalogue of films that aren’t
available anywhere else, you have to pay $6.99/month for Disney+. And you won’t find any content on there
that Disney doesn’t own. In fact, in the last few years it seems like
every major movie and TV studio has come out with their own streaming platform and in the
case of Netflix, they vertically integrated backwards by becoming a distribution platform
that now also produces its own content. Of course, since they also still distribute
far more content they do not own, which separates them from the likes of Disney+. The 1948 Supreme Court case that broke up
production and distribution is based on antitrust laws. Which are a set of laws with the purpose of
regulating private business to promote healthy competition with the explicit purpose of benefiting
consumers. Essentially, whenever companies control a
market in such a way that the consumer is forced to spend more money, there’s usually
an antitrust case to be made. The idea is, if there’s a lot of competition
amongst companies in the same industry, they will gain market share by appealing to consumers
through better products and services and of course by offering lower prices for those
products and services. If one or two companies already have a majority
of consumers buying what they’re selling, due to a lack of other options, then those
companies can essentially charge as much as they want without fear of losing customers
to someone else. This is called an oligopoly and was exactly
the situation with the major movie studios at the time, lead by Paramount the largest
studio at the time. Making theaters independent allowed for smaller
studios to get their films in front of audiences and actually compete with the big guys. And it also led to more competition amongst
theaters themselves. In my opinion, there is an antitrust case
to be made around streaming services as consumers are forced to pay monthly subscriptions for
access to content by some of the biggest studios, with Disney leading the pack. This is particularly true as media properties
are increasingly consolidated. Disney alone has gobbled up Marvel Studios,
Fox, Pixar, Lucasfilm, ABC, FX, National Geographic, ESPN, A&E, Lifetime, History Channel, and
a bunch of other intellectual properties. Once these so called streaming wars come to
an end, I suspect there will only be a few winners because consumers aren’t going to
subscribe to ten different platforms, they’re going to go where the most and best content
is, in other words the platforms with the deepest pockets and most extensive catalogues. Once that happens and you’re hooked on Disney+,
you can expect that $6.99/month to start ticking up, just like the monthly fee for Netflix
has risen over the last several years while it was essentially the only big player in
streaming. To me it’s pretty clear that streaming platforms
are the new theaters and philosophically there’s very little difference between them besides
the fact that you don’t have to leave your couch to watch a film. Allowing big production studios to fully own
the distribution of their content will eventually lead to less competition and a higher cost
for consumers. While I personally spend way too much time
watching Netflix and more recently Apple TV+, I wonder if we’re just reliving Hollywood’s
Golden Age, both the benefits and the consequences.

17 Comments

  • Reply FutureNow January 27, 2020 at 3:42 pm

    For the record, I still binged all of the Mandalorian on a free trial. 😅Thank you to my patrons for supporting me on patreon.com/FutureNow.

    FYI, the Trump Administration's Justice Department is actively trying to end the "Paramount Decrees" of United States v Paramount Pictures, and theater chains are potentially in danger again. Felt I needed to mention this somewhere if not in the video.

  • Reply Coaster Expert January 27, 2020 at 3:44 pm

    Yes.

  • Reply Corlos January 27, 2020 at 3:55 pm

    Finally

  • Reply Gabriel The Obsessive January 27, 2020 at 4:01 pm

    Is it weird to say that after six months this is not the video I was expecting?

    Still it's a fair and admittedly necessary comparison. I'm glad that plenty of people seem to recognize they can't afford this many streaming services a month, but that only goes so far when they ignore the problems caused by having a small number of companies in charge of all their media intake. Despite that my biggest concern right now lies with Disney's perpetual control over copyright laws (really deserving of its own video), and the amount of consolidation happening in the media overall.

  • Reply Exa Cognition January 27, 2020 at 4:19 pm

    Glad to see you back! I was checking your status the other week and I was worried you had stopped making videos.

  • Reply Sword Smash January 27, 2020 at 4:22 pm

    Nice video, upload more dude, your content is interesting

  • Reply H January 27, 2020 at 6:18 pm

    I don’t think it is violating anti-trust. Anti-trust is based on the premise that consumers are hurt due to de facto monopoly. I don’t see the case here (at least right now). Also this law is outdated which was passed to liberate the movie industry from religious influence. European countries do not have such law and their indie theaters are doing much better than the us counterparts whose profit has to rely almost exclusively on concessions.

  • Reply Ryan J Officer January 27, 2020 at 7:08 pm

    Well… in this day and age, it's more for the corporations, by the corporations. Who cares about the people, we're here to serve them. (at least, that's how it seems.)

  • Reply Viola Jackson January 27, 2020 at 9:30 pm

    Definitely yes.

  • Reply Lucas Kilian January 27, 2020 at 9:39 pm

    Just to add:

    The basic form of Netflix barely increased adjusted to inflation

  • Reply daddyleon January 27, 2020 at 9:59 pm

    Yo ho ho, matey!
    – all I have to say on this.

  • Reply FutureNow January 27, 2020 at 10:12 pm

    In before all the comments about how I pronounce "Disney" throughout the video.

  • Reply cjeam January 27, 2020 at 10:49 pm

    Careful, the Big Mouse will be after you now, and based on the history of copyright extensions the Big Mouse always gets his cheese.

  • Reply Kyler Noe January 27, 2020 at 11:53 pm

    Haven’t commented in a while, just wanted to remind you that you are significantly underrated and you deserve a million subs

  • Reply Justin O'Brien January 28, 2020 at 3:45 am

    And here I thought Netflix jacked their prices to pay for Friends, which I'd never watch under torture. So I cancelled. YT will suffice 😀

  • Reply v p January 28, 2020 at 5:12 pm

    All hail the piratebay

  • Reply Mike Watkins Jr January 28, 2020 at 10:45 pm

    Disagree with the United States v. Paromount case as a reference for Disney because it says that movie studios can’t control and own the theaters that their films are shown at. Disney plus involves owning a streaming platform. Now one can argue the anti trust rule in general but I mean Comcast, coke, google etc. buy off companies 24/7 and yet they go unpunished. So I doubt such a case would go anywhere but sure you could make a case… just not using the Supreme Court case you reference in the vid

  • Leave a Reply