Mega-deal-making usually isn’t good news for a wide variety of content, be it news, local radio or filmed entertainment. Common sense would dictate that’s especially true when the deal-maker is
the company that has turned movie production into Procter & Gamble-style brand management.
But here’s a glimmer of hope for movie lovers: One of the most surprising outcomes of Disney’s $52.4 billion deal to acquire most of the assets of
is that it’s likely to be good news for those who want to see Hollywood’s most powerful studio make more than Star Wars trilogies, Marvel superhero stories and remakes of its animated classics like “Beauty and the Beast.”
Most close observers of Disney CEO
were confident that once he got control of Fox’s movie studio, he’d pluck out its most valuable franchises, like Avatar and the X-Men, and shutter the rest.
Mr. Iger, after all, is the man who sold off his company’s iconic specialty films unit Miramax and closed Touchstone, its division focused on original films for adults, because they didn’t make as much money as big-budget branded films. His approach, cold as it might seem, has been successful: Disney makes consistently bigger profits from the movie business than any competitor.
Fox produces a much wider array of films including, notably, original films for adults like this month’s Steven Spielberg journalism thriller “The Post.” Sometimes they’re huge hits few people saw coming, like “The Martian,” but others just struggle to get noticed, like the recent Kate Winslet romantic drama “The Mountain Between Us” and the historical tale “Battle of the Sexes” with Emma Stone and Steve Carell.
That’s why Bob Iger’s words were so stunning on a conference call the day his company agreed to buy Fox.
Disney has “largely migrated to the tentpole business,” Mr. Iger conceded, “and the Fox assets enable us to expand that. But we also like being in the business of making quality movies.”
Cue heads exploding throughout Hollywood.
It’s not that Disney doesn’t make good movies. “Star Wars: The Last Jedi” got strong reviews and, in animation, Disney is in a class by itself, as evidenced most recently by the critically acclaimed “Coco.”
To be sure, Fox won’t be immune from cutbacks. Job cuts in areas like distribution, home video and marketing are likely. Fox will probably no longer be an independent studio, but rather a production division of Disney’s movie operation that makes fewer than the 24 films it released in 2017.
Nonetheless, Mr. Iger’s words were significant. Disney has essentially stopped making films, good or bad, if they don’t fit into a few narrowly defined categories, such as super-heroes, Star Wars, and family animation.
Yet there Mr. Iger was on the phone with journalists, pronouncing that he was “very impressed” with Fox 2000 and Fox Searchlight, the labels behind “The Mountain Between Us” and “Battle of the Sexes,” as well as the 2016 hit “Hidden Figures” and one of this year’s leading Oscar contenders, Guillermo Del Toro’s “The Shape of Water.”
“We fully intend to stay in those businesses,” Mr. Iger stated.
What changed? Namely, the internet.
Mr. Iger’s decision to buy the Fox assets is primarily about his desire to transform Disney into a formidable rival to Netflix. Entertainment is moving online and Disney can’t rely on people buying theater tickets, DVDs and pricey cable subscriptions to power its profits in the next decade. It needs a direct relationship with consumers who will pay something like $10 a month to access the company’s premium content on any device at any time.
And the fact is that to compete with Netflix, you need a lot of stuff. Netflix has hundreds of original series and stand-up specials and documentaries. More than any human being can really process.
It’s just getting started in the movie business. Last week, it released its first film with a budget of close to $100 million, the poorly reviewed Will Smith action flick “Bright.” Behind the scenes Netflix has become one of Hollywood’s biggest spenders on new film projects and its output will likely soon put the studios to shame, just as it has done to networks with its TV shows.
Disney released only eight films in 2017. Now that Bob Iger needs more stuff, he may not care so much whether each movie his company makes is as profitable as “Zootopia” or “Thor: Ragnarok.” In the digital subscription world, content is produced to attract and retain subscribers, not necessarily to make a profit on its own.
has released some of the riskiest and most interesting indie movies of this year, like “The Big Sick.” It’s one reason Universal has kept open its struggling specialty division, Focus Features, which is behind Paul Thomas Anderson’s “Phantom Thread” and the Winston Churchill biopic “Darkest Hour”: to ensure a diversity of movies on the video-on-demand system of parent company Comcast.
Disney has already said it would make about four new movies a year exclusive for its family-streaming service. They’re likely to be along the lines of 2016’s “Queen of Katwe” and “The Finest Hours,” which earned critical respect but not enough box-office dollars to justify their production.
It’s counting on Fox, people close to the deal talks say, to help supply TV shows and movies for Hulu, which Disney intends to position as a streaming service for adults that can complement its family service.
Will those films hit theaters first? It’s likely some will and some won’t. But just as Netflix only releases movies in theaters so they’re eligible for Oscars, the “quality movies” that Disney makes after the Fox purchase will probably only get time at the multiplex to build buzz and make filmmakers happy. They’ll quickly make their way online, where Disney is finding new value in the motion pictures it previously cast aside.
Write to Ben Fritz at email@example.com