Former Amazon Studios Head Reportedly Has Warning On Netflix-WBD Deal: 'Hollywood Will Become A System That Circles A Single Sun'
Roy Price, the former head of Amazon Studios and the chief executive of the studio International Art Machine, on Saturday warned that the Netflix Inc. (NASDAQ:NFLX) and Warner Bros. Discovery Inc. (NASDAQ:WBD) deal could have dire consequences for Hollywood.
Reshaping Hollywood
In an opinion piece for The New York Times, Price warned that the acquisition of Warner Bros. by Netflix could significantly alter Hollywood’s landscape. The deal might not end filmmaking but could centralize the industry around Netflix, impacting cultural output, he said.
"But if Netflix acquires Warner Bros., this long-prophesied death may finally arrive, not in the sense that filmmaking will cease but in the sense that Hollywood will become a system that circles a single sun, materially changing its cultural output," Price said.
Narrowing Consumer, Creative Choices
The merger would combine Netflix, the leading premium streaming service, with Warner Bros., a major legacy film studio known for its theatrical releases. This consolidation raises concerns about reduced consumer choice and fewer creative opportunities, as seen in previous blocked mergers like JetBlue and Spirit Airlines.
Netflix’s annual content spending is estimated at $18 billion, while Warner Bros. spends around $20 billion. Together, they would control a significant portion of the entertainment industry’s spending, potentially doubling Netflix’s share to 18% from 9%, Price added.
Critics argue that such a merger could lead to a monopsony, reducing bargaining power for writers, directors, and other creatives.
The Department of Justice previously blocked a similar merger in the publishing industry due to concerns over diminished bargaining power, highlighting the potential impact on Hollywood’s creative diversity and theatrical distribution.
Criticism From Various Quarters
The proposed $82.7 billion merger has drawn criticism from various quarters, including lawmakers and industry veterans. Sen. Elizabeth Warren (D-Mass.) has labeled it an “anti-monopoly nightmare,” expressing concerns over the potential for increased prices and reduced consumer choice.
The backlash underscores fears that the merger could lead to a dominant streaming giant, controlling nearly half of all subscribers.
Melissa Otto, head of research at S&P Global Visible Alpha, stated that the merger is a strategic move beyond just films and shows. She suggested that it’s a significant play in the realm of artificial intelligence and technology, aligning with Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) ambitions.
Meanwhile, the announcement has impacted other industry players. AMC Entertainment Holdings Inc. (NYSE:AMC) shares have been affected as the industry braces for potential shifts. The health of AMC’s CEO, Adam Aron, adds another layer of complexity to the evolving scenario.
Read Next:
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: marekfromrzeszow / Shutterstock