The Netflix-WB Merger is Bad for America

This week, Netflix announced that it had agreed to purchase Warner Brothers Discovery Inc. If the deal goes through, Netflix would gain complete control of WB’s catalogue of films, television shows, and more. They would also, therefore, gain control of HBO Max, the streaming service owned by WB.

Netflix, unsurprisingly, cast the deal in a positive light, saying it would “[give] our members more options, [attract] more fans to our best-in-class streaming service, [strengthen] the entire entertainment industry and [create] more value for shareholders.”

It may well create more value for Netflix’s shareholders. But the positives pretty much stop at that point - because this deal would be a disaster for American consumers.

Let’s start with the obvious. Netflix is the largest streaming service in America, with over 81 million subscribers; estimates have Amazon Prime as a distant second at roughly 75 million. HBO stands in 4th place, with nearly 58 million subscribers.

You do not need to be an antitrust lawyer to understand the implications here. Combined, Netflix and HBO would have nearly 50 million more subscribers than their number two competitor. And while many people often have more than one streaming service, the conglomeration of two of the largest services in America is just simply bad for consumers, as it will remove choices for Americans and increase prices.

But this isn’t just one deodorant company buying another. This merger, if it goes through, will have cascading effects which could significantly damage America’s economy. Warner Brother’s Discovery Inc. is, after all, fundamentally about making films which are seen in theaters. Netflix is about watching movies at home — which means it’s unlikely that they will encourage people to head out instead.

Netflix will likely turn WB’s productions into streaming-only releases, simultaneous streaming/theater releases, or will limit theatrical runs. This will hurt the already struggling movie theater industry, which will in turn affect jobs and hurt communities, and compound America’s sad descent into our people being isolated from one another. The town movie theater is a great place for kids to get jobs and for people to come together. Instead, if this deal goes through, they’ll be sitting at home. As the great James Cameron said, such a merger would be a “disaster” for the film industry.

The Trump administration should use its antitrust powers to fight and ultimately block this deal — for the good of Americans everywhere.