In one of the biggest deals that the industry has seen, Walt Disney will buy most of 21st Century Fox’s entertainment assets for $52.4 billion (excluding debt).  Disney will acquire Fox’s movie and television studio, regional sports networks, cable channels FX and National Geographic, as well as Fox’s share in Sky, Star India, and the Subscription Video on Demand (SVoD) service, Hulu. Earlier this year Disney announced that it would pull its content from Netflix in the US and launch its own SVoD service in 2019. Disney has similar plans for a sports driven ESPN streaming service.  Ampere explores the potential impact of Fox and Disney removing all content from major SVoD platforms in the US and UK.

In the USA, Fox and Disney productions combined accounted for 10% of total catalogue volume back in 2016. That has already fallen to 6% today, with most of the decline driven by Fox titles.  Until June this year, Fox had the highest number of titles on Netflix’s US platform of any of the big six studios. In the past year, its top slot has been taken by Warner after the number and volume of Fox titles fell by flo percentage points, driven by Netflix’s decision not to renew Fox shows such as American Dad! and Raising Hope.

 

If Disney decides to remove the remaining Fox titles - as well as its own - from Netflix, 6% of current catalogue would disappear (345 titles), including Family Guy and Sons of Anarchy.  If Disney/Fox also pulls content from Amazon Prime Video in the US, the impact will be minimal: just 1% of the total hours of content come from the pair, although this includes American Horror Story (also on Netflix). As of October 2017, Fox and Disney productions account for 9% of the total hours of content on Hulu, the US SVoD service that the combined entity will now control with a 60% stake.  Disney has indicated that it would like Hulu to remain focused on its existing adult audience. As a consequence, growth in the number of of Fox and FX titles on Hulu is a strong possibility. An alternative approach would be to use both Fox and Disney productions on the planned new Disney SVoD service launching in 2019.

In key markets outside of the USA, where Disney may opt for a similar move, the impact on leading SVoD platforms will be less significant. Netflix and Amazon Prime Video in the UK are far less reliant on Disney and Fox titles than their US counterparts. In the UK, Amazon Prime Video could lose 2% of its total number of hours of content including The X Files if Disney removes both Fox and Disney productions.  Netflix could lose 4% of its library including How I Met Your Mother.