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How would a Disney-Fox merger affect what we watch?

Disney is buying a sizeable chunk of Rupert Murdoch’s 21st Century Fox for $52 billion. It comes on the same day that the FCC voted to end net neutrality. Hari Sreenivasan talks to David Folkenflik of NPR about what Disney wants with Fox, what it means for the world of entertainment and why President Trump has a personal interest in the deal.

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  • Judy Woodruff:

    A giant deal today in the world of entertainment. The Disney Kingdom is on the verge of getting a lot larger, buying a huge chunk of Rupert Murdoch's 21st Century Fox for $52 billion. That includes film and television studios.

    Hari Sreenivasan is in our New York studios with more on what it could mean.

  • Hari Sreenivasan:

    Some of the biggest franchises in the business, Marvel Superheroes, the Star Wars films and Pixar blockbusters — all would now be under the Disney roof. And that may signal a coming break with Netflix, Amazon and others.

    This all is happening on the same day that the FCC voted three to two along party lines to end so-called net neutrality. Many experts say companies will now be able to create a kind of fast lane on the web for the traffic and content they want you to choose or that you're willing to pay a higher rate for.

    NPR's David Folkenflik joins me now.

    So, first of all, what does Disney want with Fox?

  • David Folkenflik:

    Disney right now is looking at a big, big winter coming, and it's in the form of Netflix, it's in the form of Amazon, and it's even probably going to be in the form of Apple. These guys are going to be able to spend billions of dollars a year in creating content that they can give to digital consumers on demand.

    And so, Disney already the biggest conventional Hollywood Studio says let's ramp up. Let's get the TV studios at Fox. Let's get the movie studios at Fox. Let's get their back catalogs. Let's get their executives who have the know-how in Los Angeles and let's really do that.

    Then they're interested in international distribution, major European satellite provider, Sky, is 40 percent controlled by Fox and the Murdochs. They'll get that. In fact, the Murdochs are in the process of trying to take over that whole company.

  • Hari Sreenivasan:

    So, there are reports that the president spoke to Rupert Murdoch. They've been friends for a long time. They spoke yesterday. This deal is announced today. Any concerns?

  • David Folkenflik:

    Well, the real interest, of course, is Trump's concern. The president has forged an alliance with Rupert Murdoch, who has been the acting and leading CEO of the Fox network since they tossed out the founder over sexual harassment concerns over 18 months ago.

    And what Trump's real concern is somehow Rupert wouldn't be controlling Fox News, that he wouldn't be keeping Fox News. He's saying, hey, is that going to stick around? And I think that's a source of concern because Fox News in some ways has served not only as a cheerleader but an enforcer and as a message creator for the president and for those close to him. It's been a closed loop for him and it's been a vital part of him holding onto that base even as controversy swirls and surrounds that White House.

  • Hari Sreenivasan:

    What happens to general viewers like us, so to speak? Are there going to be differences in how we get these movies and where we get them from, especially if we're just watching at home?

  • David Folkenflik:

    Right. So, there's a real interesting thing here. You would expect — and I certainly do expect — are federal regulators either at the FCC or in the antitrust division in the U.S. Justice Department to take a very close look at this. After all, this like with like. Disney and 21st Century Fox and Fox more generally have been real competitors for decades and they're absorbing a lot of the folks they've competed with. This should have antitrust concerns.

    At the same time, the question is, if they're competing with streaming forces, will this provide an extra competitor in the streaming realm? Disney had already announced that it intended to have a major streaming service for its entertainment offerings and for a separate one for sports offerings, with certain ESPN offerings on there. Having some Fox regional sports network elements to supplant, to fuse that in there, could help. You could have additional Fox viewing things on the entertainment streaming service. Could this be more of a competition for Amazon and Apple and Netflix?

    That could be a benefit to the consumers. What I don't think is somehow it's all going to be cheaper for us. I just think there are going to be these other elements that could be viable. Disney wants to survive.

  • Hari Sreenivasan:

    This is happening on the same day that the FCC changes these rules on net neutrality. A lot of people, you know, fighting against these changes that were happening today.

    Is this the kind of consolidation that the people who didn't want these changes to happen are worried about, that there's going to be so much power in the hands of a new Disney, if they're also a streaming competitor, they can decide, well, guess what? You get to have this Disney movie at a great rate of speed, versus what I — you know, how I distribute this elsewhere?

  • David Folkenflik:

    Well, I mean, I think we have to think about the enormous consolidation that's happening all over the technical landscape, as well as the content landscape. And in some ways, these moments are blurring. You know, Netflix are creators. They're going to spend, I think, $8 billion next year in content, not just a platform for viewing other content. Disney wants to get more into the platform business.

    I think you've also see — you've seen already extraordinary consolidation in those people who provide Internet service. I mean, I think you're looking at Comcast. You're looking at Spectrum, which absorbed the old Time Warner and Charter. And you're looking, also, at AT&T and Verizon is in that mix as well.

    You're looking a very small number of companies controlling both the content information that is created and the ways in which we consume it. So, it's hard at certain points if you're looking at one group of titans to root for that group, and it's hard to root for another group of titans when you look at that. I do think there are questions about — I mean, rarely does it seem to me that the consumers ends up better of.

  • Hari Sreenivasan:

    NPR's David Folkenflik, thanks so much for joining us.

  • David Folkenflik:

    You bet.

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