Streaming giant Netflix said it’s buying Warner Bros. Discovery in a deal that would create a global entertainment behemoth. CNN and other cable channels Warner Bros. owns are not part of the deal.
JUANA SUMMERS, HOST:
In a blockbuster Hollywood deal announced this morning, Netflix said it’s buying the vast studios and streaming properties of Warner Bros. Discovery. CNN and other cable channels owned by Warner Bros. are not part of the deal, but this would create a global entertainment and streaming giant. NPR media correspondent David Folkenflik is here with more. Hi there.
DAVID FOLKENFLIK, BYLINE: Hey, Juana.
SUMMERS: So David, Netflix is already the world’s leading streamer, so why does it want or really need to buy Warner Bros.?
FOLKENFLIK: Yeah. And let’s underscore the fact this is a departure for Netflix, which has not been in the business of acquiring. It’s been in the business of building or licensing content for itself. I think it’s a signal Netflix wants to be the everything store – the Amazon of entertainment…
SUMMERS: Right.
FOLKENFLIK: …That they are going to – they’re already the world’s leading streamer. They’re already a dominant name in American streaming – and that they want to essentially blot out the landscape as others are trying to grapple with them. So they’re putting together the Warner Bros. movie studio plus HBO – you know, one of the great brands – and HBO Max, whatever name it’s going by on any given day – put that together with Netflix. They’ve promised to continue to release Warner Bros. movies theatrically in theaters. But it would give it huge control over entertainment content. Some of the iconic hits coming under the same umbrella – Game Of Thrones franchise, Harry Potter from Warner Bros. and “Squid Game.” You know, these are elements of huge things that keep people coming back again and again.
SUMMERS: I mean, Discovery and Warner Bros. are some of the biggest names in the industry. How could this change the shape of Hollywood?
FOLKENFLIK: Well, it’s allowing Netflix to have access to, you know, all the intellectual property of Warner Bros. as well as their future things, assuming this deal goes through. You know, if you think of other franchises, there’s Looney Tunes, one of the totems of my youth, but also the DC superhero franchises, right? And Warner Bros. has, in some ways surprisingly, had a lot of successful movies lately, but Hollywood has been sculpting itself around the challenge that Netflix has posed.
So you saw Disney not too many years ago acquire most of Fox’s entertainment holdings to bulk up and supersize. You’ve seen Comcast and Paramount thinking that they would have a strong chance. In Paramount’s case, they thought they had the inside track to acquire Warner Bros. studios and streaming services so that they could elevate from being CBS and NBC and Paramount and Universal respectively, combine it with Warner Bros. and take on Netflix. Netflix is saying, no, no, we’re going to supersize the supersizing. This is a behemoth, a colossus bestriding the world of entertainment, should it comes to pass.
SUMMERS: I mean, anytime two companies that are in the same businesses merge, there’s a big if. There are these antitrust concerns. How hard do you think it’ll be for Netflix to actually get this approved?
FOLKENFLIK: Well, so let’s talk about this in two ways. One of which is the conventional notion of antitrust, and that is the amalgamation or the combining of too many things that are of a like kind in ways that can distort the market – distort the market for other players in the market, distort the market for consumers. After all, people are already shelling out, you know, in the teens of dollars each month for Netflix, and for those who also subscribe to HBO Max, for that. What leverage would this provide Netflix to raise that cost?
I think you’re going to see the antitrust division of the U.S. Department of Justice, which is led by somebody who takes a keen interest in these matters, really give a hard look at, does this concentrate too much power in the industry in this way? And you’re seeing state attorneys general have questions about that and become more, shall we say, aerobic and muscular in thinking about antitrust issues of late. And you’ve – you’re also likely to see that, to be honest, in Europe, in the European Union.
Let’s talk about Trump world. President Trump plays an outside role in all of this, even though conventionally, presidents aren’t supposed to weigh in on these kinds of decisions. Donald Trump made clear that he thought that the path should be eased for the Ellison family, that is father and son – Larry Ellison, cofounder of Oracle, one of the richest humans on the planet, one of a handful of the richest people on Earth, and David Ellison, his son, the head of Skydance, who engineered just this year the takeover of CBS’s parent company and Paramount’s parent company, now called Paramount Global – merged that with Skydance.
He was thinking, we’re going to take all of Warner Bros. Discovery, all of their studios, all of their content, all of their cable properties, pump up Paramount. We’re going to take on this. They’re going to try to challenge this in a variety of ways, they’ve signaled, and we’re going to see how that goes. The question of what Trump wants matters these days. His Justice Department clearly takes its cues. So I think that’s going to be a real second strain to that question.
SUMMERS: And David, the one thing we haven’t really touched on is those cable properties you mentioned. What happens to CNN and the other cable properties if this deal does go through?
FOLKENFLIK: So as Comcast did with its cable properties, these would be spun off, presumably so someone could purchase it. The people who you’d think might be most interested might be the Ellisons. After all, they just acquired CBS and have been thinking about CBS News – might want to fold CNN in. But it is making these places vulnerable. It’s not clear what their future holds.
SUMMERS: NPR media correspondent David Folkenflik, thank you.
FOLKENFLIK: You bet.
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