Industry Outrage Over Netflix’s Warner Bros Acquisition
Hollywood writers, producers, directors, and theater owners expressed doubts regarding Netflix Inc.’s proposed $82.7 billion acquisition of Warner Bros. Discovery Inc.’s studio and streaming operations, arguing that it poses a risk to their interests. The Writers Guild of America, which announced in October it would oppose any sale of Warner Bros., reiterated that stance on Friday, declaring that the purchase by Netflix “must be blocked. The world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent,” the guild stated. “The outcome would eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers, and reduce the volume and diversity of content for all viewers.” The concerns expressed by the major trade organizations in the movie and TV industry emerge amid a decline in film and television production, reduced ticket sales, and significant job losses in Hollywood. Earlier this year, another legacy studio, Paramount, was sold. Warner Bros. represents approximately a quarter of North American ticket sales, amounting to around $2 billion, and is in the process of being acquired by a company that has historically avoided theatrical releases for its feature films. As part of the deal, Netflix co-CEO Ted Sarandos has assured that Warner Bros. will maintain its commitment to releasing movies in theaters.
“The proposed acquisition of Warner Bros. by Netflix poses an unprecedented threat to the global exhibition business,” stated Michael O’Leary. “The negative impact of this acquisition will affect theaters from the largest circuits to one-screen independents.” James Cameron, the director of some of Hollywood’s highest-grossing films in history including Titanic and Avatar, stated in late November, that the buyout of Warner Bros. by Netflix “would be a disaster. Apologies, Ted, but my goodness.” Sarandos has stated, “theatrical films are dead.” During a conference call with investors on Friday, Sarandos stated that his company’s reluctance to release films in cinemas was primarily due to “the long exclusive windows, which we don’t really think are that consumer friendly.” The company announced on Friday that it would “maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films.” During the call, Sarandos reaffirmed that perspective, stating, “right now, you should count on everything that is planned on going to the theater through Warner Bros. will continue to go to the theaters through Warner Bros.”
Competition from online platforms such as YouTube and Netflix has prompted a significant reassessment in Hollywood, paving the way for acquisitions like the Warner Bros. deal announced Friday. Media giants such as Comcast Corp., the parent company of NBCUniversal, are divesting from cable-TV networks like MS Now and USA, redirecting their resources towards streaming services. Warner Bros. employees on Friday, Chief Executive Officer David Zaslav stated that the board’s decision to sell the company “reflects the realities of an industry undergoing generational change in how stories are financed, produced, distributed, and discovered.” The Producers Guild of America stated on Friday that its members are “rightfully concerned about Netflix’s intended acquisition of one of our industry’s most storied and meaningful studios,” while a spokesperson for the Directors Guild of America expressed worries regarding future pay at Warner Bros. “We will be meeting with Netflix to outline our concerns and better understand their vision for the future of the company,” stated the Directors Guild. In September, the Directors Guild of America appointed director Christopher Nolan as its president. Nolan has expressed his disapproval of Netflix’s approach to film releases, which involves exclusive online distribution or limited simultaneous theatrical showings, and has stated that he will not create films for the company.
The Screen Actors Guild stated on Friday that the transaction “raises many serious questions about its impact on the future of the entertainment industry, and especially the human creative talent whose livelihoods and careers depend on it.” Oscar winner Jane Fonda expressed her views on Thursday prior to the announcement of the deal. “Consolidation at this scale would be 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,” the star of the Netflix series Grace and Frankie wrote on the Ankler industry news website. Netflix and Warner Bros clearly have a different perspective. In his statement to employees, Zaslav remarked, “the proposed combination of Warner Bros. and Netflix reflects complementary strengths, more choice and value for consumers, a stronger entertainment industry, increased opportunity for creative talent, and long-term value creation for shareholders.”
