Chris Pizzello/Invision/AP
Disney’s film brands appear during a presentation at CinemaCon 2018, in Las Vegas, April 2018.
Alien has gone missing. As a classic of the horror and sci-fi genres, it’s traditional around Halloween for repertory theaters to hold showings of the film. This year, however, is different. Alien is among hundreds of 21st Century Fox movies now owned by Disney that are apparently no longer available for local theaters to get the rights to play, due to a change in ownership.
The Walt Disney Company has long maintained a “Disney Vault” policy: They virtually never allow screenings or physical re-releases (VHS, DVD, Blu-ray) for popular older films unless the company decides to do specific highly publicized events for them, thus creating a degree of artificial scarcity for their beloved classics. But Disney’s growth into an emerging monopoly and acquisition of Fox properties means that the company suddenly has a wide variety of new films in their archives. According to reports by local theaters around the country, many of which have been screening showings of Fox films for years, Disney has decided they are retroactively putting these films into their vault.
That means no Alien, no The Fly, and no The Omen this Halloween. And no Miracle on 34th Street or Home Alone for Christmas. And no The Princess Bride, Moulin Rouge, The Sound of Music, or hundreds of other films, any time.
To understand the effects of this move, it’s important to realize how much of Hollywood the company now owns. Fox was the number one producer of Best Picture winners at the Oscars, with 60 movies nominated over its history. In combination with Disney and Pixar’s own films, the acquisition of Fox means that the Walt Disney Company now owns one in seven of all films to ever receive a Best Picture nod. With this impressive library in stock, the company now seems to be preventing many of the best movies of all time from seeing daylight in public until they decide it’s profitable to do otherwise.
I recently argued that “[w]hen theaters rely on a handful of films from the same companies to stay afloat, it gives those companies enormous leverage.” Just one month later, we now know that Disney has already begun taking advantage of this in a new way, by denying repertory theaters access to what one film programmer called “‘steady earners’… You show them, and people turn up.”
The effects of consolidation are especially profound in industries like film, which rely heavily on intellectual-property rights. Giving a film a copyright is essentially giving them monopoly rights over use of the copyright in question. But unlike for many everyday products, competitors can’t simply produce a near-identical alternative to creative works like films for consumers to choose between, because every film is unique by nature. A cheap re-creation of The Sound of Music simply won’t draw in consumers the same way that, say, a generic competitor to headache medicine will. In this way, media giants like Disney function as a monopoly on monopolies—a uniquely powerful arrangement.
In what is itself a sign of the company’s outsize power, the film programmer quoted above “asked not to be named … for fear of angering Disney.” Others working in the struggling independent-theater industry are less shy: The owner of Atlanta’s historic Plaza Theatre estimates Disney’s move may cost the institution 10 to 12 percent of its yearly income. It’s hard to come up with a more salient example of “restraint of trade”: curbing the flow of commerce to control a market. Even in our hands-off antitrust environment, this is supposed to be illegal.
The row over classic Fox films is a recent example of how concentrated market power can distort the economy and our culture, but it isn’t the only one, even for Disney specifically. Disney’s recent calculated moves regarding China’s cultural censorship serve to illustrate how monopolies compound one another’s issues globally.
The NBA recently drew controversy after the Houston Rockets’ general manager had to publicly walk back support for pro-democracy protests in Hong Kong in order to maintain good business relations with China. Large companies oriented toward global markets have long had to watch where they step regarding China’s politics, but the NBA story has drawn attention to exactly how much these practices have come to resemble imported censorship.
If there’s one lesson Disney seems to have taken from the story, it’s to keep their mouths shut. Disney CEO Bob Iger recently commented: “The biggest learning from that is that caution is imperative. To take a position that could harm our company in some form would be a big mistake. I just don’t believe it’s something we should engage in in a public manner.” The problem is that when a company becomes as large and diverse in its activities as Disney has, it cannot remain neutral. And as its business activities elsewhere illustrate, the company has already shown that it will roll over to the highest bidder.
Disney acquired a majority stake in ESPN as part of its ABC merger in 1995, well before its most recent wave of acquisitions. As the most popular sports network in America, it makes sense that ESPN would engage in writing and commentary on the NBA-China controversy. But it didn’t. The organization, whose president has previously said they would “[cover] the intersection of sports and politics,” both abstained from doing its own reporting on the issue and instructed producers to explicitly warn opinion writers and broadcasters against talking about the political aspects of the issue.
This internal censorship could theoretically be defended as ESPN’s extreme attempt at neutrality on the issue. But other activities make it much clearer that the intention is pleasing the Chinese government. On October 9, the network showed a map of China on-air during a brief review of the news surrounding the controversy. The map itself, however, raised some eyebrows:
To include Taiwan—a nation with a complex relationship with mainland China—in a map of the country itself is notable, but not entirely unheard of. But this visual goes well beyond the norm. The map also includes a visualization of the infamous “Nine-Dash Line,” a line that China uses to identify its controversial territorial claims in the South China Sea. The line, ruled against by international arbitration courts and rejected by the U.S. government, includes islands which are also claimed by the governments of Brunei, Malaysia, Taiwan, the Philippines, and Vietnam. The territorial conflict takes place right in the middle of some of the world’s most important trading routes and strategic naval territory, and is so controversial that the U.S. regularly sails warships through the area with the sole purpose of proving that China’s claims won’t deter it.
Less noticeable, the map also includes the disputed areas of Arunachal Pradesh as part of China. Arunachal Pradesh is an Indian state, and residents of the territory are Indian citizens. However, China claims a major part of the region as its own, a controversy that helped spark a small war in 1962.
This map didn’t come out of nowhere. The China blog Shanghaiist notes that it “is the map of the country that you’ll always see used in China, but rarely outside of it, and particularly not in neighboring states.” In fact, China regulates this matter quite tightly, fining those who sell maps of China within the country that don’t include its full territorial claims. When DreamWorks released an animated children’s movie earlier this year in collaboration with China’s Pearl Studio, it was sure to include this preferred map, sparking a controversy of its own in Southeast Asia.
Disney’s ESPN went a step further. As Reuters noted, the network has previously used standard maps of China. But at some point during the Chinese censorship controversy, ESPN started to make clear attempts to minimize open discussion about the topic while also recognizing illegal Chinese territorial claims on American television, all while they and their parent company reassure the public that they seek to be neutral on the issue.
What’s notable about this story is that it essentially features two monopolies interacting with one another. While Disney increasingly strengthens its grip on U.S. media, the Chinese government maintains a state monopoly on cultural imports. In 2012, Vice President Joe Biden made a deal with the Chinese government raising the quota of foreign films that are allowed to be shown in China at any given time, telling attendees at a conference sponsored by the movie industry association that “your share of box office revenues doubled” shortly after. Deepening the connections between China’s film import monopoly and the media giants controlling the American film industry had the unintended effect of leaving the latter even more reliant on Chinese markets. Selling their films to Chinese markets gave them the motive to begin following cultural instructions from Beijing; their status as the only players with the ability to produce large movies at scale gave them the ability to.
The core problem isn’t that Disney and other media giants are loyal to the Chinese government as opposed to the American one—it’s that they aren’t loyal to anything at all. It’s worth remembering how the Disney CEO phrased his decision to stay “neutral” on the issue: Taking a position wouldn’t be a mistake, taking “a position that could harm our company” would be. By design, market players are solely concerned with their bottom lines, regardless of any greater ethical or economic concerns. But our present system of monopoly capitalism means that those same players are held accountable by neither government regulation nor significant market competition. If crushing independent movie theaters and taking positions on global territorial disputes are profitable activities, we can only expect to see more of it.
