Originally published in French on the Révolution Permanente site, part of the international network La Izquierda Diario in France.
“Netflix is like the Albanian army launching a global offensive”said a former CEO of Warner Bros. – Discovery in 2007, when the DVD rental company had just launched its video-on-demand subscription service in the U.S. Eighteen years later, the platform has become the number one in the field of streaming platforms with 301.6 million subscribers worldwide and annual revenues of more than $11 billion.
On December 5, Netflix announced the acquisition of historic Hollywood production and distribution company Warner Bros. Discovery (WBD) for $82 billion (including $10 billion in debt). The agreement includes the HBO Max streaming platform and its catalog of classic films, as well as the historic Warner Bros. franchise.
Three days later, the American studio Paramount Skydance, led by David Ellison, son of the second richest man in the world, presented a counteroffer of $108.4 billion, which included WBD’s television networks such as CNN, at a price per share higher than that offered by the streaming platform. However, on Wednesday, December 17, Warner rejected the counteroffer, putting Netflix in a very advantageous position to close the deal. “We are confident that the merger of Netflix and Warner Bros will offer consumers greater choice and greater value“explained the American study in its press release.
An acquisition of a colossal sum that would strengthen Netflix in the global market
For the streaming giant, this acquisition has a lot at stake. It could radically alter the balance of power in Hollywood and cement it as the undisputed leader of global streaming. A Bank of America Research analyst explained: “If it manages to acquire Warner Bros., the streaming war will be officially over“In this context, Netflix could implement a “price domination strategy“, as the newspaper La Tribune suggests. As it explains, “The merged entity could choose to maintain both brands, but create a combined offering at a very competitive price“In other words, this merger would allow Netflix to offer prices that would wipe out all the competition and, as soon as its rivals had difficulties, set prices as it pleased.
This is not the first time that a streaming platform absorbs a historic Hollywood company. In 2019, Disney acquired Fox, and in 2021, Amazon bought Metro-Goldwyn-Mayer for $8.5 billion. Streaming platforms have acquired a dominant position in the sector in recent years, absorbing historic Hollywood production companies that were long considered unassailable. This latest acquisition would mark the culmination of the conquest of Hollywood by the platforms, according to the New York Times.
The magnitude of the agreement is proportional to its possible consequences. In fact, the platform has obtained a loan of $59 billion: a transaction one hundred times larger than the purchase of the rights to Roald Dahl’s works in 2021, according to Reuters, which was already a record. With this acquisition, Netflix would increase its global market share from 18% to 21%, according to Les Échos, compared to 5% for Paramount+ and 4% for NBC’s streaming service.
Donald Trump adopted a measured tone after announcing the acquisition of Netflix in early December. Remaining evasive, he stated that the Netflix acquisition “could be a problem” and that he would participate in the decision. The American president does have direct financial interests in this acquisition, since Trump’s son-in-law, Jared Kushner, director of the investment firm Affinity Partners, financed part of the Paramount offer. According to the Wall Street JournalDavid and his father, Larry Ellison, carried out a campaign of several weeks to convince Donald Trump to support them. To persuade him, they promised “reform programming” from CNN, a channel so detested by Donald Trump.
Expanding its catalog to serve American soft power
This acquisition would also have international repercussions. From its first American original series, House of Cards, in 2013, and its arrival in Europe in the early 2010s, Netflix’s strategy has been to integrate into the local audiovisual landscape to improve its image with government and cultural institutions, while producing a large volume of content accessible to an international audience. For example, since 2021, the platform has committed to investing 4% of its annual gross revenue generated in France in financing French and European cinema. It participates in the most prestigious film festivals in the world, is one of the main patrons of the French Cinematheque and owns prestigious movie theaters… all of this to project a quality image and reach the most demanding audiences. The acquisition of Warner Bros., one of the most recognized studios in Hollywood, owner of the rights to the works of Clint Eastwood and Stanley Kubrick, is part of this strategy.
With the acquisition of HBO Max, Netflix’s catalog can be renewed “for decades,” explains media lawyer Corey Martin. The rights of Soprano, Sex in New York, Game of Thrones, The Wire y Friends They will now be in the hands of the Netflix and HBO Max platform, the first and third largest subscription video on demand (SVOD) platforms, together they have more than 400 million subscribers and control 30% of the US market in this sector, according to the Wall Street Journal.
“Together, we will shape the new century of storytelling, creating extraordinary entertainment offerings for audiences around the world.” platform management at X stated on December 5. Ted Sarandos, co-CEO of the company, also explained to financial analysts that same day:Over the years, we have built a reputation as builders, not buyers… But this opportunity will allow us to fulfill our mission: entertain the world“This statement reflects the main objectives of the platform: to promote its dominance in the national and international market, while serving as a key tool of the soft power United States .
Orange Is the New Black, Sex Education, Bridgerton…Netflix cultivates a progressive neoliberal image by featuring racialized or LGBT characters, and promoting “parity” and “diversity” within the company. This appearance is mainly part of an economic strategy based on the search for market niches to expand its audience and maximize profits. At the same time, it acts as an important conduit for soft power American and neoliberalism. Examples abound, such as the series Tapiewhich glorifies the career of the “self-made man” Bernard Tapie, whose career, however, was based on profound attacks on workers, or the series Trotskywhich spreads pro-Russian and anti-communist propaganda.
But the future of the platform’s politics could change, given the decline of progressive neoliberalism and Trump’s advance with his militarist and imperialist ideological offensive. If Netflix manages to acquire Warner and consolidate its position as a major American and global audiovisual giant, the United States could take advantage of this position to launch new culture wars if the platform’s leaders decide to follow the same path as the technology billionaires who quickly aligned themselves with Trump’s ultra-reactionary agenda.
Towards a worsening of working conditions in the audiovisual and film industries
The acquisition is not good news for movie theater owners or their audiences. Ted Sarandos recently described cinema as an “obsolete concept” and has never been involved in the film distribution process. If the streaming platform decides to reduce the theatrical release of Warner Bros. films, this would cause a decrease in the number of films available, lower attendance at theaters and, consequently, a reduction in revenue from ticket sales. In response, the platform’s CEO attempted to reassure the public, stating that they will continue to “release the studio’s films in theaters, using traditional release windows,” without offering clear guarantees.
The acquisition of Warner is mainly justified by the creation of technological jobs in the entertainment industry. Netflix says the acquisition is an agreement that will generate many good jobs in the United States […]. The group has already created a studio in New Mexico and is investing $1 billion to create another on a disused military base in New Jersey.. But behind this corporate rhetoric, the merger promises reduced job opportunities. In fact, according to the newspaper The CrossNetflix aims to save between 2 and 3 billion dollars a year, three years after signing the agreementwhich translates into a significant loss of jobs and a deterioration in the working conditions of those who participate in its production: directors, scriptwriters, technicians, editors, producers, agents, etc.
This is the risk that the WGA (Writers Guild of America), the American screenwriters union, immediately denounced on December 5, declaring: “This merger would result in job losses, lower wages, a deterioration in working conditions for all entertainment professionals, higher prices for consumers and a reduction in the volume and diversity of content offered to all viewers. Industry professionals and the general public are already suffering the consequences of the tight control that a few powerful companies exercise over the content that consumers can see on television, streaming services and cinemas. This merger must be blocked“.
The impact of streaming platforms and the restructuring of the industry on film workers is already visible. For example, between 2023 and 2024, Netflix and Disney+ halved their orders for animated series in France, and animation sales plummeted in the United States, Le Monde reported this summer. As a result, three of France’s most influential animation studios had to declare bankruptcy. TeamTo was acquired at the last minute before liquidation, and the Technicolor group, which employed 10,000 people, was on the brink of collapse. Thousands of editors, scriptwriters, technicians and directors who worked with them lost their jobs.
The massive strike of screenwriters, followed by that of actors and actresses in Hollywood in May 2023, is a symptom of the negative impact of streaming platforms on the industry. 11,000 American screenwriters demonstrated in front of the offices of Netflix, Amazon, Paramount and HBO, denouncing the deterioration of their working conditions. This deterioration is linked to the reduction in the duration of the series and retransmission rights, as well as the opaque decisions of the platforms, which can stop the production of a project at any time and without justification. This strike triggered the most significant paralysis of the industry in sixty years. It serves as an example to follow for audiovisual workers in their fight against the growing precariousness of their working conditions.
They must mobilize against the standardization and monopolization of a sector that benefits the big capitalists and serves their reactionary ideology. Film workers should prepare to face more turbulence and, as a result of Netflix’s policies, a possible wave of layoffs. In this context, they must demand the expropriation, under workers’ control, of the various links of the cultural industry. Production companies, television channels and platforms must be managed by those who write, film and produce the works, to protect their working conditions and produce films and series that tell the stories and struggles of those who are never heard: workers, young people and the working class.
Source: www.laizquierdadiario.com
