Hollywood's backlash against the Netflix bid, versus silence on Paramount's Saudi-backed financing, reveals a deeper anxiety. The industry fears Netflix—an "outsider" it blames for upending its business model—more than the political implications of foreign government ownership.
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Netflix's acquisition of Warner Bros., including plans to continue theatrical releases and maintain HBO Max, shows that pure-play streaming is evolving. To dominate, streaming giants must now integrate and preserve traditional studio operations and business models rather than simply aiming to disrupt them.
Hollywood's current crisis is self-inflicted, stemming from a decades-long failure to adapt its business models and economics. Instead of innovating to compete with tech-driven services like Netflix, the industry persisted with inefficient structures and is now blaming disruptors for inevitable consumer-driven changes.
The bidding war isn't between equals. Paramount, a smaller and weaker legacy media company, sees the acquisition as a necessity for future relevance. For the much stronger Netflix, it's an opportunistic play to cement its market leadership.
The primary concern for creators regarding a Netflix-Warner Bros. merger isn't consumer price-gouging (monopoly). It's that Netflix would become the single dominant buyer of content (monopsony), giving it immense leverage to suppress creator pay and control.
The acquisition isn't a traditional consumer monopoly but a monopsony, concentrating buying power. This gives a combined 'Super Netflix' leverage to dictate terms and potentially lower wages for actors, writers, and directors, shifting power from talent to the studio.
By launching a bid for Warner Bros., Netflix CEO Ted Sarandos has ingeniously stalled the market. This move forces all other potential suitors and targets into a holding pattern, as any significant M&A activity must now wait for the outcome of this lengthy regulatory battle, giving Netflix a strategic advantage.
The entertainment industry's resentment towards Netflix is misplaced. Swisher argues that studios are in decline because they failed to modernize, lean into technology, and listen to consumers. Netflix simply capitalized on the industry's inefficient and outdated business models by building a product people wanted.
Political resistance to deals like a Paramount-Warner Bros. merger isn't about consolidating entertainment franchises like Batman. The core fear is the potential for one entity to control major news outlets (CNN, CBS), creating a perceived "monopoly on truth" and wielding outsized political influence.
The high-stakes bidding war for Warner Bros. is seen as driven by media executives' desire to reclaim the news cycle, which has been dominated by politics and AI. The acquisitions are a strategy for regaining cultural relevance as much as they are about business consolidation.
In its hostile takeover bid for Warner Bros., Paramount's key pitch for regulatory approval stems from its financing. The deal is funded by Trump-allied figures like Larry Ellison, Jared Kushner, and Middle Eastern sovereign wealth funds, creating a belief that a potential Trump administration would favor their acquisition over Netflix's.