BURBANK, Calif. (AP) - Analysts say Disney's $52.4 billion deal to buy a large part of 21st Century Fox will put it in a better position to compete with the likes of Netflix and Amazon.
Paolo Pescatore of CCS Insight says that "even a giant like Disney has not been immune" to changes in how consumers watch TV shows and movies. The deal, he says, will give Disney greater control of all aspects of content, from creation to distribution. That would lead to greater sources of revenue.
Disney already has announced plans to create its own streaming service in 2019 to compete with Netflix. Disney will now be able to beef up that offering with additional video from Fox.
Daniel Ives, head of technology research at GBH Insights, calls the announcement a "home run deal" for Disney, one that will give the company and its upcoming streaming service "a clear runway to gain market and mind share" from Netflix and others.
Disney is buying a large part of the Murdoch family's 21st Century Fox in a $52.4 billion deal, including film and television studios, cable and international TV businesses as it tries to meet competition from technology companies in the entertainment business.
Before the buyout, 21st Century Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders.
The entertainment business is going through big changes. Tech companies are building video divisions. Advertisers are following consumer attention to the internet. And Disney is launching new streaming services, which could be helped with the addition of the Fox assets.
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