15/12/2017 Asia Business Report

Now on BBC News all the latest

business news live from Singapore.

Walt Disney and 21st century Fox

sign a $52 billion lock of the deal

that may alter the entertainment

landscape. And the last Jedi is

expected to be an unstoppable force

at the box office and for

memorabilia merchants. Hello and

welcome to Asia Business Report two

of the biggest names in the movie

business are emerging in order to

take on Netflix and other online

streaming services. Walt Disney has

agreed to purchase most of 21st

Century Fox, owned by Australian

media mogul Rupert Murdoch. They are

a doing it for 50 two billion

dollars. Disney will acquire all of

these brands you see on screen here.

As part of the deal, the Disney CEO

will stay on the company until 2021.

He said that the purchase was

inspired over an informal chat with

Mr Murdoch.

I have a lot of respect

for Rupert Murdoch and what he has

been able to build over the years.

He and I were musing at some point

this summer over the industry and

the need to reach consumers in ways

I described and the disruptive

forces that we both witnessed in our

time in this business. After some

musing it seemed to me that there

may be an opportunity to put our

companies together to create

something that is even better than

the two that were separate.

Earlier,

our business editor gave more

insight as to why Disney paid so

much money for 21st century Fox's

assets.

Disney find this quite

attractive. In the past, what they

have done is focused on acquiring

incredible premium content such as

Lucasfilm, Star Wars, Pixar, popular

brands. 21st Century Fox has some of

its own. The tantalising prospect of

the X-Men and the avengers being

brought together. What they have not

had, they need to beef up

distribution. The company driving

this consolidation today are people

like Netflix and Amazon partner

prime. These are gigantic companies.

Even Disney did not feel it had the

scale more distribution to compete

with these. And you are right to

highlight the Hulu streaming

service. Adding that to the access

of hundreds of millions of people

through star India then you have

content and distribution. They are

going to take the fight to the big

guys in Silicon Valley.

We know that the Disney Franchise,

the Last Jedi is the latest

instalment in the Star Wars saga

opens worldwide this weekend. If you

have not had a chance to see it, you

must be living under a rock because

the Franchises made over $30 billion

over the years. The Star Wars brand

has become its own universe with a

growing number of things like

cartoons, comics, merchandise. For

more let's go to Tim McDonald who is

at an installation in Orchard Road

in Singapore. I know you have some

menacing looking storm troopers just

around the corner from you. Can you

tell us about this? What does that

mean in terms of the force has for

merchandising?

It is quite

incredible. Think about it, this is

a prime commercial district in

Singapore and that's not Christmas

music in the background, that is the

Imperial March. An indication of the

scope and scale of Star Wars and its

cultural reach and business reach. A

very big part of it has always been

merchandising. As you can see from

these storm troopers, they have been

updated a little, a racing stripe on

the helmet, and this has been a big

part of the business. Originally the

studio thought that Star Wars may be

a flop and when George Lucas said to

them that he will take a smaller car

from the director fee in exchange

for merchandising, they agreed.

Little did they know that that would

be one of the biggest bits of the

business and years later it has made

George Lucas a rich man. Disney

acquired the Star Wars Franchise a

few years ago and it is quite

interesting because we were talking

about the battle for streaming. Star

Wars will play a major role in that.

When Disney launches its streaming

service in 2019 to go head-to-head

with Amazon and Netflix, Star Wars

will play a major role because they

are planning a live action show like

the big budget shows from Netflix

such as house of cards.

Speaking of

merchandising, did you ever owned

one of those figurines?

I did. I had

a couple of storm troopers.

Is that

why you are not scared of them? I

had Princess Leia. I must admit.

Thank you so much, Tim. In other

news making headlines, America's

communications regulator has voted

to end net neutrality. That is the

principle that Internet service

providers must treat all Internet

traffic the same. The rule was

introduced by President Obama two

years ago and they are saying that

innovation will now be increased.

Speaking of the Internet, according

to a report released this week by

Google, Southeast Asia has the world

's fastest growing Internet economy.

Is expected to reach about $50

billion this year alone and

estimated to be worth around $200

billion 2025. A large part of that

has to do with the pace of Internet

adoption. Southeast Asia has more

Internet users than the whole

population of the United States.

Could the region's Internet economy

overtake that of the US? That is the

question our colleague asked the

Regional Chief.

Asia today has more

Internet users than all of the US.

300 million people in the US, 330

million in Asia and we are adding

more regularly. From a user

standpoint we are bigger than the US

from a monitor -- from a

monetisation it will take time to

catch up we will have an Internet

economy that is large.

In terms of

the funding that is going into these

Internet companies, we see are

concentrated in Singapore and

Indonesia. Is there a reason why

venture capital is not going to the

other countries?

Venture capital

environment in Southeast Asia has

changed dramatically. In 2015 there

was only $1 billion, at billion

dollars of investment across the

region. That number is now 8

billion. Of the 8 billion, around $6

billion is gone into seven different

areas. The $2 billion invested over

the last two years in early stage

companies. That is a significant

change over what it was in 2015.

Seven unicorns for all of Southeast

Asia is not impressive compared to

other countries. You would be

surprised. There were four unicorns

eight months ago and before that

there were zero. Sir having seven is

impressive. India, which has had an

ecosystem that has been somewhat

longer than Southeast Asia only have

nine unicorns. On the other

countries have more than Southeast

Asia and India are the US and China.

We have pretty much surpassed every

other country in the world.

And that

was Google's Southeast Asia chief.

China is the biggest foreign

investor in New York City. The

country's investments made around

11% or over $24 billion on

commercial real estate that it

earlier I spoke to an expert in New

York he said that Asian capital

controls are impacting the market.

In short, the last year we have seen

a marked increase, and that came

through the second quarter of 2017.

Over 2016, the increase was

approximately 50%. We saw a

tremendous buying power that came

out of China, with a marked slowdown

in the last two quarters. The

currency controls that you look to

-- alluded to are having an impact.

Looking at the markets before we go

and they are all week. That's on the

basis of the fact that people are

unsure about the progress of the

Republican tax reform. That is it

for this edition of the Asia

Business Report.