|
 |
Well, the streaming wars are over, and Netflix won.
The announcement came out on Friday that Netflix would be buying Warner Bros. Discovery’s studio and content assets, including HBO Max, for a staggering $83 billion. Netflix beat out Paramount Skydance and Comcast Universal.
Investors are responding as if they expect the merger to be approved by the federal government. Netflix agreed to a $5 billion breakup fee if the merger doesn’t go through.
 |
I actually think this deal being approved is very much up in the air. I don’t think the Trump crew loves Netflix. This merger could look like an antitrust violation because Netflix and HBO Max are two of the top 5 streaming services in the U.S. and combining them seems somewhat anti-competitive. And consumers understand both of these brands and wouldn’t like the idea of them becoming a single entity. Paramount is attempting to keep the bidding war going saying their offer was higher.
The natural expectation is that prices would go up with this merger. $83 billion has got to come from somewhere. I ran a poll on social media: 47% didn’t like this merger, 17% liked it, and 36% didn’t know.
The streaming wars always seemed like something of a winner-take-all environment, as most people don’t have the money, time or appetite to subscribe to Netflix, Amazon Prime, Hulu, Paramount, HBO Max, Disney, Peacock, Apple TV, and ESPN, let alone Starz or AMC. The average household signs up for 4 streaming services. Netflix has scale. Amazon and Apple have infinite money to burn. Disney has decades of legacy content. Everyone else is on the outside looking in.
On a personal note, which streamers do I watch? I did the Disney bundle with Hulu and ESPN. Netflix of course. HBO Max for Game of Thrones and its successors. Prime gets bundled with some other stuff. I sprang for Apple to watch Silo. That puts me at 7, almost twice the national average.
I’m old enough to remember when AOL bought . . . Time Warner, the predecessor company to Warner Bros. Discovery, back in 2000. Back then, there was an investor saying that “Content is king.” Today, content is more of a subject to distribution and the algorithm. Netflix can make a massive hit out of a random movie like “Gods of Egypt” or a forgotten show like “Suits” just by putting it front and center in front of everyone. Scale begets scale.
One concern that many have with this merger is that the movie theatre experience will die. Box office receipts and attendance have dropped precipitously as more and more Americans stay home and wait for it to hit their TV. Netflix has famously avoided the multiplex for most of its releases, while Warner Brothers Discovery is trying to drag people back out to the theatre to watch Supergirl. Event movies may also go the way of the algorithm in the new world.
There’s something special about a large group of people experiencing a film together in a theatre. Enjoy it while you can.
This week on the podcast I talk to Jono Wilde, the new head of the Good Life Movement about making mental health a public policy priority. Want to look up? Email [email protected] if you want a few months off from your wireless bill and be less screen-consumed with Noble Mobile. Offline’s IRL no-phones party is coming to Baltimore, NYC, and Miami upcoming. My new book comes out in February. Remember to touch grass.
 |
| ||||||||||
