Movie Theaters Were Already in Trouble. With Disney's Fox Deal, It's Double (bloomberg.com)

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.

Comments

Guess who isn't doing their job!

[Gravis Zero]

Yep, it's still the Federal Trade Commission!

Re:Guess who isn't doing their job!

[Faaln]

This has nothing to do with protecting theater chains and everything to do with an overly consolidated market. It shouldn't be approved; it moves too much of the market to a single company.

Re:Guess who isn't doing their job!

[Anonymous Coward]

Yep, it's still the Federal Trade Commission!

Guess who are the idiots that voted for this administration ?
Stupid asshole voted for conmen and criminals, and those conmen and criminals are doing their jobs just right.

Re:Guess who isn't doing their job!

[Anonymous Coward]

As magusxxx pointed out down below:

When Iron Giant came out my local multiplex showed it only one day a week at about 10-11am on Saturday. That's it. All the employees including management said the same thing, "If we don't do this then Disney won't give us their next big animated release."

This deal doesn't change much. Disney have been too large for a long time now.
For a functional capitalism you don't just need competition, you need so many competitors that the customer always can take their business elsewhere.
If you can count the competitors on your hands then they can get away by being equally bad.
For competition to work you need so many actors that they can't keep track of each other.
You need a situation where there is always someone who doesn't want to play ball.

By the time someone takes more than 10% of the market and you can name all the major players by the top of your head it is already too late.
The market should have been regulated before it came to that.

Re:Guess who isn't doing their job!

[geoskd]

Please. This was going to happen no matter what administration was in.

Just like the dismantling of net neutrality was going to happen under a democrat?

Both parties are beholden to the large donors, there is no doubt about that, but republicans are proud of their heritage of taking from the poor and giving to the rich. Trickle down economics doesn't work, and yet they insist on continuing these broken policies every time they are in office. Net neutrality and mega-corporation mergers are just symptoms of the larger problem.

The republican party sold themselves to the voters as the party of fiscal conservancy, and yet they just voted to increase the budget deficit by $150B per year, and *give* more than half of that money to the wealthiest people. That is not fiscal conservancy, that is maxing out your credit cards to buy luxury items and pretending the bill will never come due. If republicans were really about fiscal conservancy, they would cut the military budget down to the same levels as the rest of the world. The US spends more money on the military than the next highest 8 countries combined. The republicans could have cut defense spending by that $150B per year, and given that money to the rich and been heros, instead they insist that those who must foot the bill are the poorest Americans (by cutting their health care), and all of our children (by racking up a huge deficit). If ever there was proof that the tea-party was bullshit, every single tea party congressperson voted for this thing. Your personal share of the bill for this tax cut will be $7,500. Add that on top of the existing debt, and every single american owes close to $75,000. Someday that bill will come due, just like it did in Greece and Spain. Remember that the next time you go out to vote for one of these guys.

Does Dolby Atmos reproduce a tiny violin well?

[SeaFox]

With control of more blockbusters, not only does Disney gain more leverage over theater chains such as AMC and Carmike Cinemas...

I'm shedding so many tears for those multi-million dollar theater chains.

Re:Does Dolby Atmos reproduce a tiny violin well?

[Paradise Pete]

Or, ya know, he was making a joke. Not all jokes are scientifically accurate.

Re:Does Dolby Atmos reproduce a tiny violin well?

[SuricouRaven]

The usual measure of intelligence in population studies is IQ. It's an awful measurement, but it's also easy to measure and analyse when you have thousands of subjects to process. IQ scores follow a normal distribution - and always will, because they are intentionally normalised to make sure of it. So, in this case, it doesn't matter. Mean, median, mode, all the same.

Re:Does Dolby Atmos reproduce a tiny violin well?

[magusxxx]

I know you're being sarcasm, I can tell by the font you're using...except there is an issue I haven't seen addressed yet.

When Iron Giant came out my local multiplex showed it only one day a week at about 10-11am on Saturday. That's it. All the employees including management said the same thing, "If we don't do this then Disney won't give us their next big animated release."

This is EXACTLY the reason why the studios were told to sell of the theaters back in the 70's. Because independent movie studios weren't being allowed to show their movies in better theaters. And it'll only get worse if the deal goes through.

Oh, and to answer your topic question...Sorry, I don't know. But it did reproduce The Red Violin very well. :D

Oh joy, yet more oligarchization...

[Anonymous Coward]

"Disney is becoming the Wal-Mart of Hollywood: huge and dominant,"

This is just another example of how monopolies are taking over the US on every level and your elected leaders are facilitating it. You guys really need to take over and purge and then reform your two party system. Doing something similar to the judiciary would probably help too since it has been loaded up with corporate mercenaries right up to the SCOTUS. That is to say, if you don't you'll find yourselves living in a de facto monarchy before middle of the century which I suppose some people on the extreme right wing might find appealing. One dear leader, infallible, above criticism....

Re:Oh joy, yet more oligarchization...

[I'm New Around Here]

I find it amusing that people are so upset about a store chain that started a few decades ago, and rose to dominance because of low prices. No one forced you to go to Walmart, there are other stores with any product type they have on the shelves, and we all have seen the "Walmart shopper" pics.

If you want to go to another store, do so. I make the choice every week which store I want to give my money to.

Remember Yahoo and MySpace?

[Botnet-of-People]

Compared to buying real property (property that you can hold in your hand or step on with your boots), the buying of IP is almost like somebody selling you the Brooklyn Bridge. Whether Disney manages to increase or collapse the value of the "property" depends largely on management making the right moves to promote it. With many real properties, say like gold or until recently steel mills, the buyer comes looking for you. Netflix could very well create B-movie franchises worth more than the combined paper cost of the Fox properties simply by acquiring the right source materials and adapting them well for broadcast. Who knows, maybe Netflix, Amazon, or even GooTube can create their own empires of emptiness out of fringe graphic novels, manga or user-generated short-form videos, adapted properly (read, not shamelessly prettified with Disneyesque princess endings) for the variable playing times needed for the multiple (big, medium, small) screens that everybody now seems to have. I'm thinking of movies that can be viewed both episodically on your smart phone during a long commute or in one popcorn session with your SO.

Surprised they lasted this long.

[SuricouRaven]

The only reason I think cinemas exist at all is for people who want to watch new releases rather than wait for them to come out on disc.

The cinema used to offer something no other place could: A gigantic screen, supremely clear images, and an audio system that'd give you powerful volume from the chair-rumbling explosions to the chirping giggles of children. Then home cinema technology advanced. What does a cinema offer now that you cannot get just by having a big screen TV (or, as we call them now, a TV) and some half-decent speakers? You can't go for the social experience. Comfort of other viewers mandates watching in silence, so you might as well watch alone.

All they can offer now is the time to drive out there, a captive audience to show trailers and advertising, the crying child behind you, the tall man in front, and the fat person who tries to squeeze past you mid-film to get to the toilets.

Re:Surprised they lasted this long.

[mccalli]

Devil's advocate time. They also offer a place to concentrate on watching the film, not wondering whether you should do the washing up or checking social media. They offer a change of scenery - simply getting out of the house can be good. They offer an event, a bit of...well....theatre. They give an audience too - watching films in a cinema is different to watching them at home, particularly comedies or popcorn-munching dumb action films. It's a different atmosphere.

I like going to the cinema. Smaller cinemas I really wish would work on their sound more but I enjoy going, I enjoy sitting and knowing that I'n going to be watching a film - not doing something else, not talking or being expected to talk through the story. Just a difference, a break for a few hours in an environment where someone else is going to take care of it for you.

I know people will now reply with tales of horror with uncaring audiences who are talking on their phones during the film or that time the projection was out of focus or misaligned (happened to me on a 3D viewing - horrible) or...or.....Yes. I know. They're imperfect. But, in my experience at least, for the vast majority of the time those things don't happen and I get the experience I'm looking for. I enjoy it.

Re:Surprised they lasted this long.

[thegarbz]

People in general will complain about the occasional bad experience discarding all the good ones. As someone who goes to the cinema 3-5 times a month I can count on one hand the number of times the experience was unpleasant. They do occasionally exist but often they don't last long. Last time I saw a guy as much as use his mobile phone silently, he was kicked out within 5min. The one time we had an out of focus projection they fixed, it restarted the film and gave us a 50% discount card for our troubles.

Re:Surprised they lasted this long.

[cascadingstylesheet]

The only reason I think cinemas exist at all is for people who want to watch new releases rather than wait for them to come out on disc.

The cinema used to offer something no other place could: A gigantic screen, supremely clear images, and an audio system that'd give you powerful volume from the chair-rumbling explosions to the chirping giggles of children. Then home cinema technology advanced.

Well, that's not all ... society changed.

No, it was never perfect, but I know that audiences were better behaved, in general, when I was a kid. Who wants to pay top dollar to watch a movie with a bunch of rude jerks?

Re:Surprised they lasted this long.

[I'm New Around Here]

Also unlike TV screens, cinemas can give you 3D in a way that is actually compatible with human eyes.

That's called "a play", and it is in a different theater. Possibly a school auditorium.

Theater Bandwidth

[mentil]

Big-budget films shown in theaters nowadays are played off of hard drives (shipped to the theater, encrypted), on a Windows PC connected to a digital projector. The bitrate of these files can be much higher than what even a UHD Bluray can offer, as the latter is limited to 100GB and hard drives can be had that are 100x+ that capacity. That means video quality can be much higher than what you can get for your home cinema. Even with gigabit internet you can only stream just over 1TB over the course of a 2.5 hour film (and of course no streaming service offers anywhere near gigabit streams). One might argue this kind of bandwidth is unnecessary for film, but the emergence of lightfield photography, and VR video, can make use of it easily. Lytro's top-quality lightfield video currently uses 500GB/minute, for reference. People who care about top-end video quality will still come to theaters. VR can simulate the experience of watching a film in a theater (with other people in it, if you wish), from your home, albeit with reduced fidelity. Watching at home will almost always be about convenience, with some quality tradeoffs.

Movies are expensive

[MoarSauce123]

Not too long ago taking the family out to the movies was cheap entertainment. These days it is a major investment and if we go we make sure that there is a very high chance of us liking the movie. If it gets any more expensive I will ask for my money back when the movie sucks. It's not the theater's fault, they just resell defective merchandise. They should charge the distributor and film studios.

60% How about 90+%

[Anonymous Coward]

I worked in a movie theater in high school for a large theater chain and got to know one of the assistant managers pretty well. He said that they had to pay 90-92% of all ticket sales for Star Wars episodes 2 and 3 to the studios. There's a big difference between 60% and 90%. He said that the tickets paid for the building payments and utilities. The concessions paid for everything else.

Monopoly

[JBMcB]

Current movie studios:

Disney/Fox
Warner Bros.
Universal
Columbia
Paramount
Lionsgate
MGM
Amblin
Weinstein

And a few dozen smaller studios, as well as the foreign studios (Toei, Canal, Gaumont, Pathe)

So is Disney using their, erm, not-really-monopoly power to keep other movies from being made? No? Then why would the FTC step in?

Yeah, but...

[fyngyrz]

The problem isn't just the mouse. Not the movie theater's problem, anyway.

The problem with movie theaters is the onslaught of ads, the uncomfortable jammed-in seating, the stunningly overpriced snackage and tickets, and the lack of great new movies in favor of Yet Another Retread Idea.

Some of this comes from outside pressure: the constant devaluation of currency and increases in taxation, demands for more and more income from the movie producers, the conversion of the stock market into a "must increase profitability" hammer.

Or in other words, pretty much on every front, greed.

You don't live in the South or Mid-West

[rsilvergun]

do you? And what forced people to shop at Wal-Mart was 40 years of declining wages. They leveraged the low prices to try and maintain their standard of living long enough to see their children on their own so they could free up that money to again, just barely hold on. Those prices were low because Wal-Mart is a predatory business in a largely unregulated economy.

Basically, you're making a lot of choices that others don't have an assuming because you personally have them that everybody else does. If people could just do anything anyone else does without regard to birthplace we'd all be billionaires.