Ownership and control in the film industry in a culture of convergence
When I think of how the film industry has become to be run by a few globalised conglomerates such as The Walt Disney Studios; who’s Fortune 500 ranks it as the 52nd world’s largest company, and Netflix who ranks at number 2 on Forbes 2018 digital 100, you can imagine my true shock when I found out that this movement was due to Steve Jobs.
In 1986 Steve Jobs bought Pixar from Lucasfilm for $5million. This was just one of many acquisitions in the 1980’s that led to the fast reduction of multimedia conglomerates through mergers as well as acquisitions. It was this consolidation that “fuelling… technological convergence is a shift in patterns of media ownership. The new media conglomerates have controlling interests across the entire entertainment industry” (Jenkins). “Apple [AAPL] has become one of the most successful technology companies of our generation. The company has developed a business philosophy of purchasing small companies that they can easily integrate into their current line of products. As of early 2018, Apple had made 95 different acquisitions.” (Bryant 2018) Steve Jobs buying Pixar to then sell it on to The Walt Disney Company in 2006 for a reported $7.4billion goes to show that AAPL model of buying small businesses was working because they made great content that could compete with Disney’s films that they released. This was Disney’s way of eliminating the competition by acquiring Pixar and still allowing them to create films but for them to be distributed underneath The Walt Disney Company logo.
This meant that the big conglomerates of the film world had to adapt as “digitization reshaped media companies into a network” (Arsenault and Castells 2008: 710) leading to greater concentration. This led to a vast majority of media privatisation being backed by the WTO (World Trade Organisation) and allowed deregulation of the media industry. In 1996 the Telecommunications act [USA] encouraged competition and reduced regulation against monopoly companies. This led to convergence and new companies had to be able to connect to existing networks. The Walt Disney Company used this to their advantage and “motivated by the need to generate additional synergistic outlets and licensable properties in the pursuit of global “family” market” (Brown 2013:10-11) proceeded to purchase Marvel Studios for $4billion.
Marvel is seen as a new model for the 21st century. Their new production/financial model provided them with a new format and allowed them to put intertextuality that acted as a form of transmedia which carries across their films. “With Iron Man… launched a unique model for cinema production in the age of convergence: an independent company with experience in a different media industry drove block-buster film content” (Johnson, 2012:1).
The streaming service Netflix is trying to compete in this new age and has become a massive conglomerate itself “What Netflix wants, at least in terms of streaming services, is to be the modern-day equivalent of Walt Disney animation or the Marvel Cinematic Universe’ (Mendelson 2019). Disney has bitten back however. “Under the terms of a blockbuster deal, Fox is selling scores of assets to Disney, including 20th Century Fox movie and TV studios, cable networks and other international operations… it is also buying Fox’s stake in Hulu, a video streaming service. That will give Disney majority control of a key competitor to Netflix” (Cox 2017).
I think these two massive film conglomerates battling it out will make it harder for other film companies to compete. However, I will also argue that it will make the film industry better. Because whilst Netflix an The Walt Disney company try and churn out franchise material and easy to watch material that you can keep quickly skip to the next episode production companies such as Comcast will have to take a more calculated approach to their films and will only invest in the ideas that are true good stories meaning that they will be able to compete with Disney and Netflix in the long run pushing them to make greater material.
· Arsenault, A. H. and Castells, M. (2008) the structure and dynamics of global multi-media business networks. International journal of communication 2.
· Brown, N. ‘Family’ entertainment and contemporary Hollywood cinema.. Scope: an online journal of film and television studies. 25. February 2013
· Cox, J. Disney – 21st century Fox deal: what does it involve and what does it mean for Sky’s future? The independent, 14th December 2017
· Jenkins, henry. (2006) pop cosmopolitanism: mapping cultural flow in a new age of media convergence’ in Fans, bloggers and gamers: exploring participatory culture. New York: New York University Press. Pp. 152
· Jenkins, H. Digital Land Grab. Technology review, mar/Apr 2000, 103:2
· Johnson Derek. Cinematic Destin. Marvel Studios and Trade Stories of Industrial Convergence. Cinema journal. 52. 1, Fall 2012. Pp. 1-24
· Jenkins H. (2008) Convergence culture: where old and new media collide. New York: new York University Press