Netflix faces a harder road if Disney nabs Fox

  • Netflix could stand to benefit if Comcast takes even some of Twenty-First Century Fox assets in the battle with Disney, according to market research firm GBH Insights.
  • While Netflix remains the undisputed leader of streaming today, that could change if 21st Century Fox's assets, especially Hulu and potentially Sky, fall to Disney.
Reed Hastings, chief executive officer of Netflix
Patrick T. Fallon | Bloomberg | Getty Images
Reed Hastings, chief executive officer of Netflix

Netflix remains the undisputed leader of streaming video today. But that could change if 21st Century Fox's assets, especially Hulu and Sky, are consolidated under Disney instead of Comcast, according to market research firm GBH Insights.

"As bidding war and potentially a breakup up of some key assets to multiple bidders (regional sports networks, Sky) to navigate any regulatory hurdles would be a major win for Hastings & Co. not to have all these assets under one hood and especially under the control of Disney," GBH Chief Strategy Officer Dan Ives wrote in a note.

Rupert Murdoch’s Twenty-First Century Fox said on Wednesday it had secured a deal to buy Britain’s Sky, increasing pressure on Comcast to respond with a higher offer. Sky is a coveted asset as U.S. companies look to expand their operations to Europe. The fight is part of a broader battle being waged in the global entertainment industry as media giants offer billions to compete with technology companies Netflix and Amazon.

Comcast would likely become a significant streaming player long-term if "against the odds" it wins out over Disney in its fight for Fox assets, Ives wrote, which ultimately could include Sky. But Disney is the most pressing threat to Netflix short-term, especially with its ESPN video streaming service launched earlier this year, and the standalone service coming within the next year.

Disney's ownership of Sky, "Hulu, and all the golden 21st Century assets would make Iger & Co...a content behemoth that would rival Netflix from a content perspective with a unique web of distribution capabilities and brand awareness that is unmatched," Ives wrote.

The blockbuster merger of AT&T and Time Warner, approved in June, spurred increased merger and acquisitions activity in the telecom and media industries, as more traditional companies push for consolidation to compete with disruptive technology companies, like Netflix and Amazon.

Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.