The massive deal to combine one of Hollywood’s oldest studios with a streaming giant hasn’t even been approved yet, but it’s already riling multiple related industries and politicians concerned about monopolies and media concentration.
If approved by U.S. regulators, Netflix’s $72 billion proposal to acquire Warner Bros. Discovery would merge Warner’s television and motion picture division, including HBO Max and DC Studios, with Netflix’s vast library and its production arm, putting two of the world’s biggest streaming services under the same ownership.
News of the impending merger drew swift reaction from the film and television industries, the movie theatre industry and U.S. lawmakers.
Here’s some of that reaction, including who opposes the deal, why it’s so contentious and what it could mean for consumers.
The $72-billion US deal is likely to face anti-trust scrutiny in Europe and the United States, as it gives Netflix ownership of one of its biggest competitors, HBO Max.
Industry concerns about jobs, diversity
The Writers Guild of America called for the deal to be blocked in a statement Friday, saying that further consolidation of the film and television industry would eliminate jobs, worsen conditions for entertainment workers and reduce the volume and diversity of content for all viewers.
The Producers Guild of America said the Netflix deal must prove that it protects workers’ livelihoods and theatrical distribution.
“Legacy studios are more than content libraries — within their vaults are the character and culture of our nation,” the union said.
Anytime there is consolidation of this magnitude, it creates concern that there will be fewer options, fewer voices and fewer decision makers coming from different perspectives, said Canadian director Sasha Leigh Henry.
What the full impact will be remains to be seen, Henry said, “But right now, it doesn’t necessarily feel great.”
“It feels like a bit of a limitation that we’re gonna be experiencing in one way or another, whether that be the kinds of content or the breadth of the perspectives and filmmakers and the kinds of stories that we’re being told.”
Actor Jane Fonda wrote in an op-ed that the deal puts Hollywood and democracy itself at risk.
In the article, she wrote that this level of media consolidation could prove “catastrophic for an industry built on free expression, for the creative workers who power it, and for consumers who depend on a free, independent media ecosystem to understand the world.”
Netflix has agreed to buy Warner Bros. Discovery’s TV and film studios and streaming division for $72 billion US. If the deal gets regulatory approval, it would shift the media landscape, and some movie theatre companies are voicing concern for their future.
Movie theatre concerns
Cinema United, a trade organization that represents movie theatre owners around the globe including Canada, is one of the most vocal critics of the deal, saying in a statement Friday that it poses an “unprecedented threat” to movie theatres worldwide.
Cinema United CEO Michael O’Leary said in an interview with CBC News that the issue as they see it is very simple.
“You have a legacy studio, the iconic Warner Brothers studio, being subsumed by a global streaming giant that has been very clear in the past that they are not interested in supporting theatrical exhibition,” he said.
“What we worry about is that there will be fewer movies that are put into theatres, fewer choices for consumers that want to go to the theatre and enjoy a movie.”
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Under the proposed acquisition, Netflix has promised to continue theatrical releases for Warner’s studio films, honouring Warner’s contractual agreements.
Netflix has kept most of its original content within its core online platform. But there have been exceptions, including qualifying runs for its awards contenders, including this year’s Frankenstein, limited theatre screenings of a KPop Demon Hunters sing-a-long and its coming Stranger Things series finale.
But O’Leary says those limited theatrical runs don’t demonstrate that the company cares about movie theatres.
“What Netflix has done historically is they’ll put a movie in for 10 days so that it qualifies for an award or something like that. That’s not a meaningful commitment to exhibition.”
What this means for consumers
The deal also sent shock waves through Washington, on both sides of the aisle.
Democratic Sen. Elizabeth Warren, a longtime antitrust hawk, said in a statement that the proposed merger “looks like an anti-monopoly nightmare.”
“A Netflix-Warner Bros. would create one massive media giant with control of close to half of the streaming market — threatening to force Americans into higher subscription prices and fewer choices over what and how they watch, while putting American workers at risk,” she said.
Sen. Roger Marshall, a Kansas Republican and close Trump ally, said the deal “raises serious red flags for consumers, creators, movie theatres and local businesses alike.”
In talks for the deal, Netflix argued that a potential combination of its streaming service with HBO Max would benefit consumers by lowering the cost of a bundled offering, Reuters reported on Tuesday.
In Canada, Warner Bros. Discovery licenses HBO content to Crave, with that subscription service offered by Bell Media heralding an exclusive, multi-year deal in 2024.
Asked about the deal Friday and how it could impact its streaming service, a Bell Media spokesperson said Crave remains the “home of HBO and HBO Max programming in Canada.”
It’s not clear if or how the merger would impact Canadian streaming customers who already pay for a Netflix subscription and a Crave subscription to access HBO content.
Having so much intellectual property under one roof could be good news for consumers, who currently have to pay for multiple streaming services to get the content they want, said Paolo Pescatore, a technology, media and telecoms analyst based in London.
“There’s clearly huge fragmentation with too many streamers chasing too few dollars,” he said.
“People are now being forced to sign up to different providers, having to spend … more money in order to get all of the streaming services that they want.”
One of the big unanswered questions is whether HBO Max and Netflix would “stay as separate streaming services or combine into a mega streaming service,” said Mike Proulx, vice-president and research director at Forrester, a market research company.
Either way, he says, customers could see some price relief in the form of a single subscription bill or bundle promotions.
The deal is subject to antitrust legislation in the U.S. and must be approved by the Federal Communications Commission.
It will be at least 12 to 18 months before the deal officially goes through, meaning it’s still business as usual for now.
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