This Feels Like The Death Of Hollywood

The international industry is trying to make sense of this sudden overnight bombshell. Netflix buys Warner Bros, which was confirmed this morning two companies.

This morning we have spread the net of reaction far and wide. Reactions to the deal vary widely. Former WarnerMedia CEO Jason Kilar tweeted his thoughts last night. Some Warner Bros. Discovery International staff we spoke with informally this morning expressed concern. Others said they hoped the deal would at least bring some clarity to the company's direction.

A number of international studio executives we spoke with said they understand the business sense of the deal and that there are benefits to the deal over a pact with Paramount or Comcast. But there has been serious concern among leading independent distributors and producers about the potential impact on the theatrical and wider ecosystem.

In a press release this morning, Netflix said it would “stand by Warner Bros.” current operations.” The proof will be in the pudding. The move has caused concern among many, especially those in the independent sector.

One leading British film producer we spoke to echoed a familiar refrain, going one step further than Kilar: “It's like the death of Hollywood,” they lamented. “It’s terrible,” added a leading Scandinavian indie distributor. “The only chance now is antitrust legislation.”

“It’s hard not to find this depressing,” said another executive at a leading European film company. “Get ready for Harry Potter – K-pop demon Hunters collage,” joked one longtime independent marketing executive, perhaps presciently.

A senior British TV producer said the takeover was “very bad” for the industry, sharing a link to an article by Jane Fonda in another deal in which the Oscar winner said it would mean “fewer jobs, fewer opportunities to sell work, fewer creative risks, fewer news sources and much less diversity in the stories Americans will hear.”

One longtime overseas studio executive offered a more optimistic view: “Netflix must feel like they're in such a strong financial position that this is too good a move not to do it. If they get WB, they'll have a dominant position in the world. It's a smart move. I think they'll be better stewards than Discovery or AT&T. I can see them maintaining some kind of theatrical business along with streaming. I think at this point in their life cycle they can afford to keep most of this business. I honestly think this will result in fewer job losses and more opportunities than other proposals.”

Another international studio executive said: “Personally, I would be more depressing if Universal or Paramount took over Warner Bros, as it would kill another quality distributor. Netflix seems to finally be seeing the benefits of a theatrical release (and even a theatrical window, albeit limited), and I'm glad to see things like the ending Stranger Things at the cinema. Netflix does a good job with general global events. They will inherit a strong distribution center that will complement their D2C business. I guess the question is a balance between whether they see this as a way to bring WB IP into Netflix versus bringing Netflix IP into theaters and sharing the experience. I feel like they've come some way along the way and maybe we'll see an explosion of what we used to call “alternative content” on the big screen. Will it make the movies better? May be. Netflix has a decent track record of quality films.”

Despite WBD's official confirmation of its intention to sell Netflix, not everyone considers it a done deal. One head of a leading international company told us: “It's not over yet. It's not really the board of directors of Warner Bros that will decide where Warner Bros ends up. It's the Trump Department of Justice and the Federal Trade Commission. Given his closeness to Ellison, I expect there will be serious antitrust complications in the coming weeks.”

Some were incredulous, which shows how quick and decisive Netflix's move was. One longtime European production and distribution executive said: “I think we're in the middle of the second act. This may be a charade. My understanding is that the deal with Paramount is pretty much done.”