Media giants search for greater power

Disney, AT&T seek to expand through proposed purchases of Fox, Time Warner

Stewie Pollock, Iris News/Features Editor

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For years, media giants have been building a large name for themselves in the world of entertainment and technology. From Comcast buying NBCUniversal to Apple acquiring Shazam, media giants are competing to keep up in the modern digital age.
However, none of these purchases have been as significant as the tentative agreement of The Walt Disney Company to buy 21st Century Fox. The $52.4 billion deal merges two of the largest media companies in the United States.
Disney, which already owns a large chunk of Hollywood, including studios such as Marvel, Lucasfilm, ESPN, Pixar and The Muppets, initiated the deal with a desire to open up two new streaming services. According to The New York Times, one service is set to premiere in spring 2018; it will primarily focus on sports and be known as ESPN Plus. The other service will be available in 2019 and focus on entertainment, including television shows and movies.
Through this new entertainment streaming service, Disney hopes to compete with other dominant streaming services, such as Netflix and Amazon Prime. The purchase of 21st Century Fox grants Disney the ability to expand its content to Fox studios. As a result, the new streaming service will be the only service that can run television shows and movies from Fox.
Robert A. Iger, Disney’s chief executive and chairman, said to the The New York Times: “[Opening new streaming services] will allow us to greatly accelerate our direct-to-consumer strategy, which is our highest priority.”
According to CNN, Disney entertainment has suffered over the past few years due to the shift of consumers from cable television to streaming services. Disney hopes that its decision to open a streaming service will alleviate this problem.
The proposed merger of Disney and Fox is occurring at the same time that AT&T is attempting to purchase Time Warner, another influential investment in the world of media, yet one that is facing much more governmental pushback.     
According to USA Today, this deal, which would cost AT&T $85.4 billion, was made because of AT&T’s longing to diversify its media content. Since Time Warner has such a varied media portfolio—featuring CNN, Warner Brothers Studios, theme parks and more—AT&T’s purchase of this company will allow it to meet this goal.
AT&T has made efforts to expand its content as a result of the media giant’s steadily declining power in the telecommunications industry, according to Forbes. This includes its purchase of DirecTV in 2015 for $49 billion, which expanded AT&T into the entertainment business.
However, the deal between AT&T and Time Warner is facing challenges from the Trump administration. The Justice Department has sued to block the potential AT&T-Time Warner merger, arguing that it would give AT&T too much control of the media. However, the Justice Department has not taken any action against the Disney-Fox merger.
In essence, traditional media giants are scrambling to compete with giants of the digital age, such as Apple, Google and Facebook. While there is disagreement over what is considered a legal merger, large companies want to be as powerful as they can be—and that includes fighting for every piece of the market they can claim.