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How Hollywood will fundamentally change after the Disney-Fox deal

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Disney CEO Bob Iger.
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Jesse Grant/Getty Images for Disney

  • Disney’s deal to buy most of 21st Century Fox has many in Hollywood curious how scaled down Fox will become.
  • What will happen to its independent film arm, Fox Searchlight? And will Disney continue to green-light Fox’s R-rated franchises?
  • What’s certain is the loss of the “big six” studios dynamic means major changes to the industry.

With the news on Thursday that Disney had bought much of 21st Century Fox’s entertainment and TV assets for an estimated $52.4 billion, the reality that Hollywood is on the brink of a seismic change is starting to hit those in the industry.

Many below the executive level at Fox are in the dark as to job security, and those at competing studios are watching everything with mouths agape, puzzled by how they compete with Disney now.

Even without Fox, Disney’s film division is on a run of winning the domestic box office for the past three weeks thanks to Pixar’s “Coco,” and it’s sure to get better for the studio – with the release of Lucasfilm’s “Star Wars: The Last Jedi” this Friday, that winning streak could extend through the three weeks left in 2017. And if the coming big releases “Jumanji” or “The Greatest Showman” (a Fox movie, by the way) do knock “The Last Jedi” from the top spot in the coming weeks, Disney still earned $5 billion-plus at the worldwide box office for the third year in a row (Warner Bros. hit that mark this year for just the second time in its history) and is likely to surpass WB as the top-earning studio at the domestic box office for the year.

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What will happen to Fox Searchlight, the independent film arm of 20th Century Fox that released the seven-time Golden Globe nominee “The Shape of Water”?
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Fox Searchlight

For fans of the Fox-owned Marvel IP that is now headed to Disney (X-Men, Deadpool, Multiple Man), there’s a lot of excitement to have all the Marvel characters under one roof. But it’s unknown how the deal will affect the output of Fox, which in the past has released about twice as many titles a year as Disney.

Along with the main 20th Century Fox studio there’s also Fox 2000 and Fox Searchlight, the prestigious distributor of independent film titles like “The Shape of Water,” which led all movies with seven Golden Globe nominations when they were announced earlier this week.

Do these divisions just get added to the Disney war chest that already includes Marvel Studios, Pixar, and Lucasfilm? Or does Searchlight become a more attractive space on the Disney streaming side and exclusively set up shop there to help compete with Netflix?

Some aspects of Fox are no-brainers for Disney. James Cameron’s “Avatar” movies will not be affected at all by the merger. Seeing that the property already has its own section at Disney World, it will fit in nicely. But the “Deadpool,” “Alien,” and “Predator” franchises are a different story. Those are R-rated projects, and Disney hasn’t released those kinds of movies in a long time.

“Let’s hope Disney allows themselves to grow up and re-enter the R-rated ball game,” Jeff Bock, a senior analyst at Exhibitor Relations, told Business Insider. “They pretty much have to if franchises like ‘Alien’ and ‘Predator’ are going to continue to evolve. My hope is that they keep the Fox department going, streamline it a bit, and concentrate on making that their adult division.”

Analysts predict the deal will take a year or more to be approved, so there’s some time to figure out just how bloody the next “Alien” can be, or whether Deadpool will have to tone it down. But the reality in Hollywood is that with the Disney-Fox deal the era of the “big six” movie studios of Disney, Fox, Universal, Warner Bros., Sony, and Paramount is over – now it’s time to adapt.

To compete, other studios could also merge – giving us essentially a movie version of the NBA’s super-team syndrome – or they could amp up efforts to infiltrate streaming, leaving their movie studios as an output for major blockbusters that audiences still want to watch in theaters.

Either way, the ramifications of this deal will reach far and wide.

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