Net Neutrality, Murdochs And Disney Bring The Fight To Amazon And Netflix

The stars appear to be aligning for 2018 to be a showdown between the old and the new in entertainment.

Net neutrality rules being relaxed means the streaming start-ups, such as Amazon and Netflix, might not be guaranteed as free a distribution ride as they currently enjoy. At the same time, the giants are closing in on them. No more so than Disney's purchase of 21st Century Fox.

The Times is obviously a Murdoch-owned paper, but its coverage this morning, for me, is right on the money. If the deal goes through, Disney will obviously have all the content rights and avenues of distribution brought to the fold by 21st Century Fox. This includes the Murdochs' share in Sky, which could leap to 100% if British regulatory authorities give their approval to an ongoing attempt for overall control.

It's a formidable lineup, and let's not forget it comes as Time Warner is hoping to merge with AT&T, although there are regulatory hurdles to overcome in that deal too.

Just suppose for a moment that both deals go ahead. You would then have two massive traditional entertainment businesses with the means of distribution. In the UK, for example, Sky would be able to provide both mobile and broadband distribution for a formidable lineup of sports, news, movies and television shows.

Let's remember, then, that Disney will be increasing its holding in Hulu to become a majority shareholder. This has prompted a strict warning to the streamers that Disney will be turning off the content taps to rivals -- no more shows or movies for Netflix.

Now, Netflix might well consider that it has enough great content. Even losing Kevin Spacey probably came at the most fortuitous time. It must have been a pain to edit him out of the final series, but it could arguably fit in with what appeared to be the developing plot line of House of Cards

However, what Netflix doesn't have is its own means of distribution. Just like Amazon, it's reliant on a householder's broadband connection and the weakening on net neutrality rules means that virtually free ride cannot be guaranteed. Should a cable company or broadband supplier choose to throttle it, all they would need to do is be open about the decision and carry on selling their own prioritised service against it. 

Now, that's for the US to decide. The EU is highly unlikely to follow suit, and so throttling is more likely to affect the streamers in their own country than over here.

However, regardless of internet speeds, that's quite some fight the big guys can now bring to bear against Netflix and Amazon. Just think of all the content the traditional media companies own and could hold back from the streamers. 

One can imagine it will only be a matter of time until Hulu is available outside the US stuffed with content from Disney and 21st Century Fox, plus others.

My prediction is that we will see another BT Sports vs Sky Sports where a so-called victory for customer choice just requires an extra monthly subscription as the traditional giants bring the fight to the new kids on the streaming block.

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