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 Netflix simply capitalized on the industry's inefficient and outdated business models by building a product people wanted.
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High-stakes bidding for legacy media assets like Warner Bros. is driven by status-seeking among the ultra-wealthy, not a sound bet on the future of media. They are acquiring prestigious "shiny objects" from the past, while the actual attention economy has shifted to platforms like TikTok and YouTube.
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 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.
To adapt to modern streaming audiences on Netflix, the 56-year-old Sesame Street brand is streamlining its content. The new strategy involves fewer characters and more music, demonstrating how even established media properties must evolve their core format to capture the attention of new generations on new platforms.
The cynical take on the Netflix-WB deal is that Netflix's true goal is to eliminate movie theaters as a competitor for consumer leisure time. By pulling all WB films from theatrical release, it can strengthen its at-home streaming dominance and capture a larger share of audience attention.
Netflix's bid for Warner Bros. may be a brilliant game theory play. Even if the deal is blocked by regulators, it forces its primary rival into a multi-year acquisition limbo. This distraction freezes the competitor's strategy, allowing Netflix to extend its market lead. It's a win-win for Netflix.
The media industry's economics have inverted. The greatest career and financial opportunities are no longer in big-screen cinema but on the smallest screens (mobile). This mental model suggests that professionals' returns on human and financial capital are highest when creating content for mobile-first platforms, not traditional film.
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.
For 20 years, Netflix's identity was built on 'no ads, no live sports, and no big acquisitions.' Its recent reversal on all these fronts to maintain market dominance shows that adapting to new realities is more critical for long-term success than rigidly adhering to foundational principles.
The creative industry is harming itself more through internal cynicism and inaction than from external threats like AI. Creatives spend too much time writing thought pieces about a perceived decline instead of actively making groundbreaking work.
