Whether Netflix’s $82.6 billion acquisition of Warner Bros. goes through or not, the deal represents a difficult moment for Hollywood as the entertainment business is increasingly overshadowed by the tech giant.
On the latest episode of the Equity Podcast, Kirsten Kolosek and I discussed the deal’s implications for both Netflix and the larger Hollywood ecosystem. Kirsten said this was just the latest move to bring more consolidation into its media business and wondered if it was “too risky” for Netflix.
Meanwhile, I discussed a conference call with Netflix executives where Wall Street analysts also seemed to be having a hard time understanding the deal. And, of course, there’s Paramount’s hostile bid — whatever happens, Warner Bros. ”It appears that the company’s days as an independent company are numbered.
You can read an edited preview of our conversation below.
Kirsten: I remember when Netflix was still a small startup. [DVDs] By email. Here they all grow and bid on traditional companies. Did that come to mind when you saw the news?
Anthony: Certainly, symbolically speaking, this is the moment when upstarts are eating up Hollywood. Even before this deal, there were a lot of articles saying, “Netflix is eating Hollywood, Netflix is transforming Hollywood.” Whether or not this deal ultimately goes through, Netflix will transform Hollywood, and this seems like one of the most dramatic things that could happen, both symbolically and practically.
Then there are all the other questions: Will Netflix get regulatory approval? Will Paramount’s hostile takeover be successful?
tech crunch event
san francisco
|
October 13-15, 2026
I’m surprised you’re catching up, Kirsten?
Kirsten: Well, my first thought was, can there be more consolidation in this market? I mean, that was a big deal for me. If I remember correctly, Warner Bros. already went through a similar integration with Discovery, right? Well then, I’ll be back. There were so many integrations that I forgot all about it.
But my second thought was what I immediately thought, I kicked. [off our discussion] We’re really thinking about how Netflix works. [has grown]and there was this drop-off along the way, and the headlines were about how the company is struggling, but will it stay relevant and how can it do that? If you succeed in actual trading, [it would] potentially reflect [that] they accomplished it.
But again, they must perform [running] Become a bigger company than ever before. And my third thought on this is: “Should they buy this?” Is this what they need to expand? Is it a risk for them to take on so much? Why can’t it just stay that way? And I don’t know if you agree with me on that. Is it too much of a risk?
Anthony: I can see how that makes sense for Netflix. This is the way to take it. [content] They already have a fairly large library and obviously some very successful TV shows, but not so much when it comes to movies. [but] Potentially, it could be even more powerful in terms of content.
[And] Now that they’re suddenly involved in all these other businesses, the question is how much they’re going to invest in theaters, theme parks, TV production for other streaming services and networks, all of which Warner Bros. is committed to, and which Netflix says it will continue to support. But we’ll see how true that is.
So while this seems to be very beneficial for Netflix in some ways, it also seems like a huge risk. If you look at the conference call that Netflix executives had with analysts after they announced this deal, you can see the analysts grappling with this question and thinking, “I understand this is going to grow your business, but is it going to grow your business?” [so much that it’s] Is it worth the $82 billion deal? ”
And of course, beyond Netflix’s perspective, there are others in Hollywood. There are all these probably accurately exaggerated headlines: “Is this the end of Hollywood?” Is this the end of the movie theater business? All the unions are basically saying, “This deal should be blocked,” or “We’re very, very concerned about this deal.” Theater owners say:
A) Is this a good deal for Netflix? And B) Is this a good deal for the entertainment business? There’s no good answer either way. [but] I think it’s more likely to be a good deal for Netflix than a good deal for the entertainment industry.
However, one thing to keep in mind as people consider these options and think about the possible outcomes is that because of the way Paramount forced Warner Bros. to consider these acquisition offers, it seems unlikely that Warner Bros. will be able to survive as an independent company. If you’re not a fan of media integration, this is a bummer.
Source link
