Jim Armitage: Disney-Fox has uphill task to put Netflix out of the picture

Jim Armitage: A cool 73% of Americans surveyed now subscribe to Netflix, which is behind shows such as Orange is the New Black: JoJo Whilden/Netflix via AP

Rupert Murdoch’s sale to Disney was all about streaming, but boy does this deal have a lot to prove.

Murdoch and Disney’s Bob Iger have been watching appalled as Netflix and Amazon have come from nowhere to be the most popular way we watch TV and movies.

In buying 21st Century Fox’s entertainment business, Disney takes majority control of Hulu, Hollywood’s jointly owned effort to stream into Americans’ homes.

There were other reasons for the deal, but Iger took pains to declare how streaming services were his “highest priority” in safeguarding Disney’s future.

However, market share figures today showed just how far Hulu has to go. In the core US market, Netflix is now taken by 54 million Americans, 37 million more subscribers than Hulu. A cool 73% of Americans surveyed now subscribe to Netflix. And Hulu isn’t even in Europe yet. Globally, Netflix is in 109 million homes.

That’s first-mover advantage and then some.

Iger hopes pushing content from Disney and 21st Century Fox’s studios through his direct streaming operations will tempt households to switch from the Silicon Valley giant. While he won’t commit to numbers yet, it’s safe to assume he’ll invest in more original content for Hulu. Expect further hits such as The Handmaid’s Tale: Hulu’s biggest critical success to date.

The deal, though, won’t actually complete for a very long time: competition regulators will see to that. And Hulu will still be 30% owned by Comcast, a cable TV giant hardly likely to want to see a mighty Hulu service compete with its own programmes. That’s messy. It wouldn’t be surprising to see this deal take a year to complete and two to bed in.

In the meantime, Netflix will keep pumping billions of dollars into content and extending its global distribution.

It has already pledged to spend $7 billion to $8 billion on new shows next year and, like Amazon, has proved itself one of the most adept and imaginative disruptors of industry this century. Who knows what it might have up its sleeve over the next two years?

Some have declared Disney-Fox a Netflix killer. In Iger’s dreams.

Lay off spread betters

Europe’s clampdown on risk in spread betting is a gift to Brexiteers.

It was precisely this kind of belt, braces and elasticated-waistband approach to curbs on financial services that led many City traders to want out of the EU. If retail investors want to leverage up to trade and clearly understand the risk, that’s their lookout.

They do not pose a structural risk to Europe’s economy. Regulators should butt out.