Forgot to post this, here’s my follow-up to my last article criticizing the Disney monopoly:
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 outsized 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…
…As Reuters noted, the [Disney-owned ESPN] 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.
…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.