Written by: Jessica Chan, Essay Competition 2017/18 Runner-up
The world of watching movies has changed significantly since the days of VHS and DVD players. Now you can stream any movie you like online. Gone are the days when you have to rummage through your drawer to find your favourite Disney movie on tape. The media industry has become dominated by several major players in the past year and it remains to be seen whether or not this development is desirable.
The chain of events concerning Fox, Sky and Disney snowballed into one of the biggest stories in media history. It started when Fox approached Sky to acquire full control of Sky in late 2016. The deal would have meant that Murdoch’s already formidable empire would have reached a new scale, especially since the proposal was an American takeover of a British company. Not surprisingly, since the Kraft-Cadbury takeover, the codes regarding mergers and acquisitions had been strengthened and the secretary of state for culture, media and sport, Karen Bradley decided to refer the proposal to Ofcom to review the deal. Though the deal was subject to some criticism, it seemed like both companies wanted the deal to go ahead, with Sky threatening to shut down Sky News if the news channel proved to be an obstacle.
Then, all of a sudden, with trumpets and fanfare, we woke up one morning to find that Murdoch was in talks with Disney to sell off some of his media empire, including the stake in Sky. What exactly prompted this turn of events? Closer analysis shows that perhaps there were signs all along that the Murdoch family was feeling vulnerable in the hierarchy of the media kingdom given players like Netflix, Facebook, and Amazon who each have made a name for themselves in the world of streaming and digital content. After Disney bought Fox, Murdoch released a statement saying: “Are we retreating? Absolutely not.” But this anomaly in decades of expansion by the Murdochs would seem to imply otherwise. And it is not difficult to see why: Netflix is now worth at least $100 billion and is investing strategically in making more original content to satisfy viewers all over the globe after its “Stranger Things” became an internet sensation. It is becoming clear that Netflix and Amazon are taking advantage of the screens on the tablets and smartphones that this generation has its eyes glued to. Even Facebook has attempted to branch into the digital content market by introducing a “watch” tab. People hardly use the TV to watch shows anymore. Indeed, why would you subject yourself to the specific timings of traditional TV when you could watch the latest episode of Game of Thrones in the comfort of your own lavatory? Disney might now be the only traditional media company remaining that can compete in the new media landscape given its extensive ownership of news and film companies.
Returning to the Fox-Sky deal, the Competition and Markets Authority announced on January 23rd 2017 that the Fox-Sky deal was not in the public interest on media plurality grounds. This means that Disney can only receive the 39% stake that Fox owned, not full control over the company. It has been suggested that the fact that Disney is now the main interested party in Sky, might change the CMA’s mind given that their decision may have been influenced by Fox’s messy history (for example, the phone hacking scandal and sexual harassment allegations). What follows next is simply more waiting and speculating until the final report in May.
What started out as a legal matter between two businesses has prompted the world to engage in discussion over political and cultural phenomena. The chain of events has served as a backdrop for the world to re-examine traditional media companies’ positions in this new era of entertainment.