Hollywood's two biggest entertainment companies, Netflix and Warner Bros. Discovery, are set to come under the same ownership. Netflix has announced it will acquire Warner Bros.' studio and streaming businesses for $72 billion (about Rs. 9.6 trillion).
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The merger of these giants in the streaming, television and film sectors is expected to restructure the entertainment industry. If the purchase and sale agreement, which is said to be in the process of being approved by regulators, is completed, Warner's DC Studios and television and motion picture division will be merged into Netflix's production arm, the Associated Press reported.
Before this deal, Warner had announced that it would split its CNN, TNT Sports and Discovery channels into a separate company called ‘Discovery Global’ and merge its studio and streaming business (HBO Max) with Netflix. Warner had announced that it would separate its streaming and studio operations from its cable business when it founded Warner Bros. Discovery three years ago.
It is not yet clear whether Netflix and HBO will operate separately or as one large streaming platform. It is believed that it will be convenient for users as they will not have to keep taking different subscriptions. The number of streaming platforms and their constant increase in fees has become a financial burden on users.
‘Cinema United’, which represents more than 30,000 movie screens (halls) in the US and 26,000 internationally, has opposed this acquisition. Cinema United believes that this will affect the film exhibition market globally. ‘Netflix’s claimed business model does not support film exhibition,’ said Cinema United’s head Michael O’Leary, ‘Movie theaters will close, thousands of jobs will be lost.’
Netflix has stated that with the addition of HBO and HBO Max programs, customers will be able to watch high-quality content and they will also adjust their ‘subscription plan’. Since popular and premium content such as ‘Game of Thrones’, ‘Harry Potter’, ‘Succession’, ‘DC Universe’ produced by Warner Bros Studios are on HBO, Warner’s vast content library and Netflix’s library are expected to be available in one bundle.
Some have criticized the merger of Netflix and Warner, saying that content production and distribution will be controlled by a single company. Currently, Prime Video has a market share of 21 percent, Netflix has a 20 percent share, HBO Max has a 13 percent share, Disney Plus has a 13 percent share, Hulu has a 11 percent share, and others have a 22 percent share. Others include Apple TV Plus (8 percent), Paramount (7 percent), Peacock (2 percent), Discovery (1 percent), and others. If Netflix and Warner merge, they will likely account for a third of the market.
Founded in 1923, Warner Bros. is one of the oldest and most famous television and film studios in Hollywood, known as the 'Big Five'. The other four are Disney, Paramount, Sony Pictures, and Universal. The Producers Guild of America has stated that such legacy studios are not only content libraries (repositories of films or series) but also American culture and identity. Therefore, the guild has urged Netflix and Warner to only make agreements that ensure that the livelihoods of employees and the film distribution market are not affected.
