Trump won’t be able to resist shaping the future of American media
Less than twenty years ago, Netflix was still sending DVDs through the post. That particular innovation helped to see off Blockbuster, which crashed from a valuation of around $5bn in the early 2000s to bankruptcy in 2011. Today, Netflix has a valuation north of $400bn and is swooping on a giant of the golden age of moving making, Warner Brothers Discovery, for more than $70bn.
The move marks the latest plot twist in an industry that has been beaten into submission by the rise of online streaming. The 2022 merger of Warner Bros (spun off from AT&T) with Discovery was designed to create a standalone streaming service that could stand up to the likes of Netflix, but the latter’s success – and ambition – means we’re well on the way to having ‘one streamer to rule them all.’
But Netflix may not get to write the script.
On Saturday, Netflix customers received an email with the subject heading “Welcoming Warner Bros. to Netflix,” in which the streaming giant said “nothing is changing today” and that “we have more steps to complete before the deal is closed.” They were right about that.
Firstly, the opposition was swift and loud. Senators from both sides of the aisle were quick to raise antitrust concerns, while Donald Trump intervened to say he would be keeping a very close eye on the deal and that the acquisition by Netflix “could be a problem.”
Netflix-Warner-Paramount an Oval Office issue
Those remarks would have been music to the ears of Paramount CEO David Ellison (whose father, Larry, is a longstanding Trump ally) ahead of a party-crashing $108bn bid for Warner Bros, aimed squarely at shareholders who might have reservations about the Netflix bid.
The battle for the future of American media is now firmly an Oval Office issue as much as it is a commercial one.
If Netflix is successful in bringing Warner Bros into the fold, it will cement its position as by far the largest streaming platform with revenues of around £70bn and 400m subscribers at a stroke. A Paramount-Warner tie-up would, on paper at least, level the playing field a bit, creating a $55bn company with 230m customers, according to Bloomberg analysis.
There will be plenty of plot twists in the weeks and months ahead, with everyone from the White House to the writers’ unions to shareholders having their say, but whichever way the story unfolds it will tell the tale of the total transformation of Hollywood and the entertainment industry.