Disney's Monopoly: Buying Everything, Breaking Laws?

The Walt Disney Company has evolved from the gentle giant of film and animation to a sprawling multinational corporate conglomerate, with profits of over $10 billion a year. In recent years, Disney has gone on an acquisition spree, buying up competitors and smaller studios, including Marvel, Lucasfilm, and 20th Century Fox, as well as streaming services like Hulu. This has led to concerns about Disney's dominance in the film industry and its impact on competition, creativity, and diversity in Hollywood. With its vast resources and market power, Disney has the ability to influence politicians, rig markets, and stifle competition, raising questions about whether its actions are breaking the law and if it needs to be broken up into smaller companies to restore fair competition.

Disney's monopolistic power in the film industry

Disney's dominance in the film industry is evident through its incredible profits and box office success. In 2019, Disney held all four slots for the year's top-earning films, and its box office sales accounted for almost 38% of the US market, with this figure peaking at over 40% earlier in the year. This market share has more than doubled in just five years, fuelled by the acquisition of Marvel Studios in 2009 and Lucasfilm in 2012, giving Disney the rights to hugely successful franchises.

The company's purchase of 21st Century Fox's assets further solidified its dominance. This deal gave Disney control of popular franchises and distribution rights to hundreds of major films. As a result, Disney stands to profit from an even wider range of films and has strengthened its position in the streaming market, with the launch of Disney+ and its ownership of Hulu.

Disney's power in the film industry has far-reaching implications. Firstly, it threatens the viability of independent films and theatres. Independent films struggle to secure spots in major theatres, which rely on Disney's big-budget blockbusters to guarantee returns. This risk-averse approach within the industry limits the diversity of films available and stifles innovation. Disney's market power allows it to impose stringent terms on theatres, giving it control over ticket revenue and film screening durations and auditoriums.

Secondly, Disney's dominance impacts the quantity and quality of films produced. With reduced competition, Disney has less incentive to produce a high volume of films and can focus on investing in a smaller number of guaranteed successes. This can result in a lack of creative diversity and a prioritisation of profitability over quality.

Additionally, Disney's influence extends beyond the film industry. The company owns a diverse range of businesses, including construction companies, media outlets, sports networks, theme parks, and more. This diverse portfolio enhances Disney's ability to stifle competition and lobby governments. Disney has already influenced government policy related to copyright law and has come under scrutiny for its response to political issues, such as the Hong Kong pro-democracy protests, to maintain good relations with China, a significant market for its films.

The growth of Disney's monopolistic power in the film industry has sparked calls for a revitalisation of antitrust law in the US. Breaking up Disney into smaller companies has been proposed as a way to restore fair competition and protect American democracy from the influence of a powerful conglomerate that controls a significant portion of American media.

The harmful effects of Disney's market dominance

Disney's market dominance has been described as a "big problem", with the company's emergence as a monopoly power in the film industry threatening the viability of creative independent films, movie theaters, diversity of films available, and worsening economic and political inequality.

Impact on Independent Films and Movie Theaters

Disney's market dominance has made it difficult for independent films to secure spots in major theaters. Movie theaters, struggling to stay afloat, rely on big-budget blockbusters that are guaranteed to earn a return, making the industry risk-averse. Independent films are increasingly being relegated to smaller venues, which also face challenges due to declining ticket sales and the emergence of a theater oligopoly. Disney's clout in the industry allows it to impose stringent terms on theaters, giving it significant leverage and control over the film industry.

Threat to Competition and Diversity of Films

Disney's dominance has led to concerns about the impact on competition and the diversity of films available. With Disney prioritizing profitability over artistic quality, there is a risk of a reduction in the quantity and quality of films produced. The company's focus on exploiting established franchises may limit innovation and risk-taking, resulting in a lack of diverse and creative content.

Censorship and Manipulation

Disney's growing media dominance has raised concerns about potential widescale censorship and manipulation. The company has been accused of adhering to the Chinese Community Party's media guidelines, including the refusal to portray the LGBTQ community in its films. This adherence to external censorship and the influence of corporate greed may result in the suppression of diverse voices and stories.

Impact on Other Industries

Disney's dominance is not limited to the film industry. The company has expanded into various fields, including finance, publishing, property, and streaming services. This expansion gives Disney the ability to influence politicians, shape government policies, and stifle competition in multiple industries. The company's size and influence can impact local economies, employment, and the overall media landscape.

Undermining of Fair Competition

Disney's market dominance has led to concerns about fair competition. The company's ability to acquire competitors and exploit its financial resources gives it an unfair advantage over smaller players in the industry. This dynamic may discourage new entrants, limit innovation, and reduce consumer choices.

In conclusion, while Disney's success and brand recognition are impressive, its market dominance has harmful effects on various aspects of the entertainment industry and beyond. These include threats to independent films, movie theaters, competition, diversity of content, and the potential for censorship and manipulation. Addressing these issues may require a revitalization of antitrust laws and a reevaluation of Disney's position to restore fair competition and protect democratic values.

Disney's aggressive control of movie theaters

Disney's control over movie theaters was particularly evident in its negotiation tactics for "Star Wars: The Last Jedi." The company demanded "top-secret terms" from theaters, including a 65% cut of ticket revenue and the use of the largest auditorium for at least four weeks. These terms were described as "onerous" and "exploitative" by theater owners, who felt they had little choice but to agree to them in order to access must-see films.

The impact of Disney's aggressive control extends beyond the financial aspects of the movie theater business. It also affects the types of films that get made and distributed. With Disney focusing primarily on big-budget blockbusters and franchises, there is less room for independent films and creative risks. This has led to a decline in the diversity of films available and a negative impact on independent distribution companies and smaller theaters.

The U.S. Department of Justice's review of the Paramount consent decrees, which prevent movie studios from wielding too much power over cinemas, has further worried small theater chains. They fear that any changes to these decrees could give Disney even more power to set unreasonable terms and put smaller players out of business.

Disney's dominance in the movie theater industry has led to concerns about the company's ability to influence culture, politics, and government policies. With its vast resources and reach, Disney has the power to shape what audiences see and, ultimately, contribute to a homogenization of culture. Additionally, Disney has a history of lobbying for copyright extensions to protect its intellectual property, such as the likeness of Mickey Mouse.

In conclusion, Disney's aggressive control of movie theaters has far-reaching implications for the film industry, culture, and competition. While Disney's success and influence may not be inherently objectionable, its growing dominance raises important questions about the impact of monopolies on creativity, diversity, and fair competition.

Disney's influence on government

One notable example of Disney's influence on government is its successful lobbying for copyright extensions, specifically the 1976 Copyright Act and the 1998 Copyright Term Extension Act (CTEA). Disney's efforts to extend its copyright over the likeness of Mickey Mouse led to changes in US copyright law, with some critics referring to the CTEA as the "Mickey Mouse Protection Act." This demonstrates Disney's ability to shape legislation to its advantage.

In addition to its influence at the federal level, Disney has also established a form of private government in its theme park resorts. The most notable example is the Reedy Creek Improvement District in Florida, which was established through state legislation in 1967. This district provides municipal services such as power, water, roads, and fire protection for the Walt Disney World Resort. However, it also gives Disney significant autonomy and freedom from regulatory oversight, allowing the company to act with the power of a government and the flexibility of a private corporation in controlling its properties.

The Reedy Creek Improvement District has been described as a "political blueprint" that redefines the boundaries between private and public space. Disney's control over this district enables it to shape the park environment and manage various aspects, such as land use, police and fire services, licensing, and zoning, without much government intervention. This level of autonomy has raised concerns about the balance of power between private corporations and democratic governance.

Furthermore, Disney's economic impact extends beyond its direct operations. In Florida, for example, Disney is responsible for generating $40.3 billion in economic activity and creating a quarter of a million jobs. The company also contributes significantly to tax revenues, which help fund local schools, law enforcement, public safety, parks, and roadways. This economic influence gives Disney significant leverage and can impact policy decisions at the local and state levels.

While Disney's influence on government has been a source of concern for some, it is important to note that the company has also contributed positively to its communities. Disney has invested in local infrastructure, supported small businesses, and donated to local nonprofits. However, the overall impact of Disney's influence on government remains a subject of debate, with some calling for stronger antitrust laws to prevent the concentration of power in private corporations like Disney.

Disney's impact on various industries

Disney's influence extends across multiple industries, from entertainment to consumer goods, and its impact is felt globally. Here is a breakdown of Disney's impact on various industries:

Entertainment and Media

Disney began as an animation studio and has since grown into a global entertainment powerhouse. It has revolutionized the film industry, particularly in animation and storytelling, with classic films like "Snow White and the Seven Dwarfs" and modern hits like "Frozen." Disney has also diversified into live-action films, television, and streaming services like Disney+. Additionally, through acquisitions, Disney now owns major studios like Pixar, Marvel, Lucasfilm, and 21st Century Fox, giving it an extensive portfolio of creative assets. Disney's dominance in the film industry has led to concerns about the viability of independent films and the diversity of films available.

Theme Parks and Tourism

Disney's theme parks have transformed the entertainment industry by combining attractions with immersive storytelling. With parks in the US, France, Japan, and China, Disney has revolutionized family entertainment and become a leader in the global theme park industry. The opening of Disneyland in 1955 marked a significant milestone, and today, Disney's theme parks are renowned for their innovative attractions and immersive experiences. The Walt Disney World Resort in Florida, for example, generated $40.3 billion in economic impact and supported a quarter of a million jobs in fiscal year 2022.

Consumer Goods and Merchandise

Disney's impact extends beyond entertainment to consumer goods and merchandise. Its characters and brands are ubiquitous in retail stores worldwide, with toys, clothing, home decor, and collectibles generating billions of dollars in revenue. Disney's influence is also felt in the food industry through its themed restaurants and cafes, offering a variety of cuisines inspired by its films and characters.

Publishing and Music

Disney has a publishing division that produces books, comics, and other written materials based on its characters and stories, appealing to both children and adults. In the music industry, Disney has a significant presence, with soundtracks for its films often becoming chart-topping hits and winning numerous awards.

Architecture and Urban Planning

Disney's theme parks have inspired architectural designs and influenced urban planning strategies worldwide. The company's use of themed environments and immersive storytelling has left an impact on the design of buildings and public spaces, incorporating unique and imaginative elements.

Community and Social Impact

Disney is committed to giving back to communities and supporting important causes. The Disney Conservation Fund, for example, supports conservation projects worldwide, focusing on wildlife protection and habitat preservation. Disney is also actively involved in community service projects and supports various charitable organizations and local initiatives. Additionally, Disney has made significant contributions to education through its educational programs and resources, offering interactive learning experiences for children.

Frequently asked questions