The report that Netflix has acquired Warner Bros. has shaken up the entertainment industry. At the time of writing this, the deal looks to be done, but how long it lasts is in question. Paramount is still fighting to get its rival bid on the table, while the possibilities of anti-trust laws and congressional intervention loom large on the horizon. But assuming that Netflix does get the deal through, there are certainly some big, valid concerns that everyone should have.
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Below you’ll find the top 5 (of the many) concerns we have with the Netflix-Warner Bros. merger, at every level of the industry.
5) Streaming Service Price Surging
Netflix has been creeping up in price ever since it started introducing streaming content as an alternative to its mail-out DVDs. What do you think happens when Netflix absorbs HBO Max, HBO, and the full Warner movie and TV library? Short answer? The Streaming Wars will be over.
With competition all but over, many predict that Netflix will slowly roll out a whole new platform model. While memes and jokes are already circulating on social media, the reality is that a two-tiered model of Netflix or Netflix plus HBO Max is a likely first step, mirroring the Disney+ Hulu model. After that, it could well be within a 3 to 5 year plan for Netflix to completely corral its subscriber base onto one big, massive, new rebranded platform. You better believe that all of these new packages will come at higher costs.
4) Quality Over Quantity Approach
Fair or not, Netflix has earned itself a reputation for being the king of lackluster productions. The green screen backgrounds, cheap CGI effects, and even the makeup in costuming at times look like they come from a house, trying to create content rather than cinema.
Warner Bros. has spent the last decade dancing on the razor’s edge of whether or not it will let content and digital data dictate its creative path. Ironically, the studio had just settled into a renewed commitment towards big quality, prestige, and blockbuster projects across HBO and theatrical distribution. But will those plans survive under Netflix? Fans of franchise IP like Harry Potter and DC have fair reason to be nervous that Netflix will flood the market, repeating the same mistake that every streamer made during the pandemic.
3) Death of Premium Cable & Prestige TV
As stated, Warner Bros. (Discovery) went through an entire identity crisis over the last ten years, just to arrive at the decision that legacy prestige brands HBO were still superior to streaming. House of the Dragon, The Penguin, Succession, Mare of Easttown, Task – HBO has climbed back to the top of the pile of prestige TV, and refuted all claims that water cooler (aka “appointment”) TV died with streaming. They have a strong run going into the next few years, with Game of Thrones still
It’s never been a secret that HBO was always a branding play for Warner Bros, not a profit play; Game of Thrones is a cash-cow thanks to licensing and merchandising, not from viewership of the actual show itself. Being the platform of the best creator-driven TV programming (cost be damned), which matters above all other TV content, is a key part of HBO’s brand. But is it something Netflix will continue to invest (read: lose money) in?
There’s a fair chance that Netflix could phase out HBO’s broadcast channel (and the entire premium cable model with it) in favor of steering viewers towards Netflix. The streaming platform has been testing the waters with live event programming (boxing matches, comedy specials) for years now, so the foundation is there. “Sunday Night on Netflix” may be an ad slogan we see sooner or later.
2) Final Death of Physical Media
Yes, we know that physical media has been a dying industry for at least half a decade now (if not more). But this really feels like it could be the death knell.
If Netflix decides to end any future production of Warner Bros. films or TV shows in physical media form, not only will it be a major signal flare to other studios, but the sheer size of the library of content that would disappear from the market might just be fatal. Warner Bros. had the relationships and infrastructure to still roll out physical media in smaller doses (anniversary or collector’s editions, etc); Netflix has spent the decade and a half clearing out its physical media infrastructure and expanding its digital streaming dominance. Only streaming content, and never having to worry about DVD/Blu-rays anymore, has always been the goal.
1) Death of the Theater Business (At Least As We Know It)
Our biggest concern is the biggest concern amongst most cinephiles in the world: Netflix will end the theatrical system as we know it. As of now, Netflix CEO Ted Sarandos is pledging continued support for movie theaters; then again, cinephiles haven’t forgotten that Sarandos also stated earlier this year that going to the movies was an “outmoded idea.” Combine that with the obvious direction Netflix is going in with their business, and there’s ample reason to be worried.
Theaters may die, but we could definitely see the business model mutate in the near future. Since the 2010s, there’s been a low-key push for streaming platforms to own theatrical real estate that exclusively offers their content. Netflix has already jumped off that ledge by opening its new “Netflix House” attractions in Philadelphia and Dallas, with a Las Vegas location set to follow. That venture is going beyond the theatrical model, creating gaming and interactive theme park attractions based on Netflix content.
Adding theatrical screenings to that mix seems like a no-brainer once the interactive portion is refined. “Going to the movies” could soon be just the beginning of a major film release; walking out of a popular film, right into an ever-changing mini-theme park “experience” (a movie, dinner, interactive gaming, shopping) is the kind of synergy studio owners have wanted for years. Netflix is looking like it could pull it off.
What do you think about the Netflix deal with Warner Bros.? Let us know on the ComcBook Forum!
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