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FX CEO John Landgraf Anticipates Brand’s Future Role as Part of Disney

FX’s role in a Walt Disney Co. enlarged by the acquisition of 21st Century Fox’s entertainment assets is beginning to come into focus, according to John Landgraf.

Speaking of Disney’s stated ambition to launch a two new streaming services — one family oriented, one adult-oriented — by the end of next year, the FX CEO said at Variety‘s Entertainment and Technology Summit in Beverly Hills on Thursday that “FX is going to have to be able to figure out a way to support and enable the success of that adult streaming service.” But, he cautioned, specifics of what form that support will take are still unknown, with the Disney-Fox deal not expected to be finalized until early 2019.

Landgraf was interviewed Thursday by Variety managing editor Cynthia Littleton at the summit, and in that conversation linked the future of FX — the cable brand he has led for nearly a decade and a half — to Disney’s streaming ambitions.

“Could FX Plus on its own scale up on its own to 50 million subscribers? No, I don’t think it could,” he said, referencing FX’s authenticated SVOD service. “Fifty million people are not going to buy a single branded service. It has to be bundled and aggregated into larger, more convenient ways of buying.”

Of the Disney-Fox deal, Landgraf said, “I think it’s a necessary step. I have curiosity and some trepidation about how it’s going to work, but I’m really excited about it.”

Disney’s acquisition of Fox’s film and entertainment-television businesses is largely driven by a desire to pump content into the direct-to-consumer pipelines Disney is building as viewership shifts away from linear television and toward streaming. Disney is not alone in moving to compete with Netflix, the largest direct-to-consumer service in terms of subscriber numbers by far. Landgraf identified the principal players in the streaming wars to come.

“You can see at least four large media companies that are going to be aggressively pursuing a large streaming platform — Netflix, Amazon, Disney in its future iteration, and AT&T-Time Warner,” he said. “I don’t think those are the last combinations, and I don’t think those are the last entrants. I’m not saying that YouTube isn’t making original series or that Facebook isn’t hedging around the edge of it. And you have to add Apple. But in terms of somebody saying, ‘Okay, we’re going to commit whatever it takes — $5 billion, $10 billion — there are four companies.” He predicted that more would join the fray in the years to come. “It would be surprising to me, for example, if Comcast didn’t eventually take a step toward creating a large streaming platform.”

Landgraf also predicted that as competition continues to heat up, the volume of original entertainment programming will continue to increase.

“As long as this titanic competition between large media companies exists and we don’t see the outlines of the end state, I think you’re going to see that kind of peak spending,” Landgraf said. “But I think our industry is looking at the biggest hangover it has ever had at whatever point you reach the end state.”

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