Movie Theaters Were Already in Trouble. With Disney’s Fox Deal, It’s Double
Posted by msmash on 26th December 2017
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Disney’s acquisition of Fox’s film studio will unite some of the most lucrative movie franchises, from Disney’s Star Wars and Marvel series to Fox’s X-Men and Avatar. With control of more blockbusters, not only does Disney gain more leverage over theater chains such as AMC and Carmike Cinemas, it also wins more films it could distribute exclusively on its upcoming online service — cutting out cinema operators entirely. From a report: “Disney is becoming the Wal-Mart of Hollywood: huge and dominant,” says Barton Crockett, a media analyst at B. Riley FBR. “That’s going to have a big influence up and down the supply chain.” Together, Disney and Fox accounted for 40 percent of ticket sales in 2016 in the U.S. and Canada, a level of market concentration that could draw scrutiny from Washington. If the deal goes through, theater owners could get squeezed. Usually a film’s box-office revenue is split evenly between exhibitors and the studio. But Disney previously has gotten theaters to hand over a larger share — sometimes more than 60 percent — on its biggest, most popular films, such as the Star Wars series. Now it could try the same tactic with Fox’s Avatar, which has four sequels in the works. “While the future of movie exhibition looks increasingly dim, a Disney-Fox merger will elevate its level of pain,” says Rich Greenfield, an analyst at BTIG LLC. Cinema chains have already suffered this year from a string of box-office bombs, including Warner Bros’ King Arthur: Legend of the Sword, and online video services such as Netflix are keeping more moviegoers at home.

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