Why Netflix’s purchase of Warner Bros. has Hollywood shaking: “It could destroy the market”

Netflix has acquired Warner Bros. Discovery for $82.7 billion: 72,000 million of them corresponding to its share capital, and the remaining money to the notable debts the company accumulated. Warner shareholders will receive $27.75 per share, while the previous interested party trembles with fury over what happened. We are referring to Paramount, which the giant of streaming in the bidding.

Paramount, as we know, it is now called Paramount Skydanceonce the tycoon David Ellison would absorb it. This huge conglomerate wanted to add Warner to its many properties. However, in recent weeks there had been competition in this operation.

On one hand there was Comcast and on the other, surprising everyone and everyone, the aforementioned Netflix. Which (thanks to its preponderance in the market of streaming) is the largest and most buoyant audiovisual company right now. And the one that consolidates its power now that it has Warner (along with HBO and HBO Max) among its properties.

Netflix’s intentions surprised him because he had never before shown interest in historical assets from Hollywood. However, controlling Warner means adding to its catalog an immense library of classic content and the most juicy intellectual properties, so Netflix did not hesitate to join the fight against Paramount Skydance and Comcast, and end up hitting the table.

The worst case scenario

The possibility that it was the winning company was already causing concern in the industry hours before the sale was confirmed, and now it is possible that we are facing a turning point in the functioning of Hollywood. There is a possibility that the Donald Trump Administration (a great ally of Ellison, having been central in the purchase of Paramount) wants to torpedo the process but Netflix has also imposed itself on its rivals, and we will have to examine what this could lead to.

That Netflix would buy Warner was the prospect that created the most discomfort, and the one that, before the result was announced, had already provoked statements against organizations such as the Directors Union either Cinema United. The latter is the main association of US film exhibitors, which hours ago warned about how control of Warner at the hands of Netflix could be lethal for its business.

Your spokesperson, Michael O’Learyhe questioned Netflix’s commitment to movie theaters to begin with. “Sporadic and truncated releases in theaters to meet the awards criteria in a handful of theaters It is not a commitment to exhibitionBecause that would be the fundamental problem: once Netflix has bought Warner, the theatrical window for its productions could have been drastically reduced.

There are no details about what Netflix would do with these films, although for now Paramount Skydance had been quick to clarify that its intention was to keep Warner as an independent company, producing a minimum 14 movies for cinemas over the course of a year. For its part, it has emerged that, under the control of Netflix, the Warner production would have a period of exclusivity in movie theaters of only two weeksbefore jumping to streaming. A company source has denied this, stating that the periods would be longer.

What seems clear is that, with Netflix at the helm, the distribution and exhibition of Warner productions will suffer some type of alteration. And this is what led to an open letter, signed by a group of industry figures who have not given their names (although among whom there are believed to be several established directors), and addressed to the US Congress. The text seeks to raise awareness among congressmen of both parties (and particularly within a context as unstable as the one favored by the Trump Administration) about the danger of Netflix controlling the operation of a major Hollywood history.

The fear of filmmakers

The charter collective is defined as “concerned movie producers”and leaves the letter unsigned for fear of retaliation to which the power of Netflix can lead. Which, according to the letter, “could destroy” the film market by altering the timing of Warner films arriving on Netflix or HBO Max. These signatories say that Netflix “will exercise effective control over the film market”reducing the presence in theaters and forcing post-release window rates to drop.

They also remember that Ted SarandosCEO of Netflix, once said that his business objectives had nothing to do with cinema. “Taking people to the movies is not our business”Sarandos said in 2023. Finally, the statement urges the House of Representatives and the Senate to rule against the acquisition and subject the agreement to the “highest level of antitrust scrutiny“”Millions of jobs and a form of art are at stake,” they conclude.

That Ellison fails to take control of Warner is not exactly bad news, since his affinity with the Trump administration could have led to censorship similar to those within ABC (under the umbrella of disney) affected Jimmy Kimmel. It means keeping Ellison and the Republican Party away from assets as vital as the cnnalso under the control of Warner, and that is certainly good news.

What does not arouse so much optimism, obviously, is that Netflix now has Warner’s film division (which we have always known as Warner Bros.) under its power.

Which precisely, in recent times, has had an excellent creative performance through the leadership of Michael De Luca and Pamela Andyguarantor of premieres like Sinners, Weapons either One battle after another. Original films that have brought people to theaters amidst glowing praise, and that subscribed to a commitment to movie theaters that Netflix surely has no interest in maintaining.