Hollywood has unleashed a wave of fear that the Netflix acquisition of Warner Bros will further erode the struggling movie business and slant the Hollywood balance of power toward the streamer.
“Terrible.” “It’s f–king insane.” “This will kill moviegoing,” a producer, publicist and filmmaker each told TheWrap separately. The reactions came fast and furious, and were almost unanimously negative. The industry is not only angry about the streaming giant buying up the iconic movie studio – it’s terrified.
The transaction represents a seismic shift in the entertainment world, with the largest streamer buying one of the major, legacy Hollywood studios, and a leading supplier to the theatrical business. Given Netflix’s track record of disrupting the industry, it’s understandable that this megadeal would have many nervous about the long-term ramifications. Especially those whose livelihood depends on the health of movie theaters.
“The single biggest reason for Netflix to buy Warners is to choke 20% of theatrical supply and shut down f–king movie theaters,” said a leading Hollywood producer who asked for anonymity . “That’s what they’re going to do.”
If the acquisition passes through regulatory hurdles, Friday will be known as “the day the theaters died,” he said, adding, “That will be David Zaslav’s legacy. As the guy who killed moviegoing.”
Netflix co-CEO Ted Sarandos tried to alleviate some of the concerns, noting in a call with investors on Friday morning that the company intends to run HBO “largely as it is” and would support the studio’s theater output.
Few who spoke to TheWrap believe it.
“This is an attempt to accelerate the decline of movie theaters and consolidate power,” a filmmaker who spoke on the condition of anonymity told TheWrap. “Zaz helped destroy the profitability of the TV business and now he is helping to destroy the profitability of the movie business,” a second filmmaker said.
This sentiment was echoed by most Hollywood insiders who spoke with TheWrap on Friday, all of whom expressed concern about the future of the industry should Netflix undercut Warner Bros.’ theatrical output. Some are optimistic that the deal won’t pass through regulation hurdles, while a few expressed hope that Sarandos will keep WB largely intact.
“Netflix is a technology-based streaming company,” said Hyde Park Entertainment Group CEO and producer Ashok Amritraj. “They clearly bought Warner for a reason. Besides the library and IP and brands, we can all only hope that the theatrical business and making 15 movies a year, stays. To take such an iconic, legendary studio and turn it into a subset of a streaming business would be tragic.”
The intensely skeptical reactions are a sharp contrast to the relative silence from the filmmaking community throughout the bidding process, aside from James Cameron (of course) who said Netflix winning WB would be “a disaster.” But now that the deal is real, the gloves are coming off.
The primary cause of concern is Netflix’s stance on theatrical. The streamer’s staunch refusal to exhibit any of its movies for longer than a three-week period in theaters before hitting the streaming service has put it at odds with a theater industry that insists longer windows are necessary for it to stay alive.
Thus far, Netflix movies have largely been relegated to independent theaters as major chains like Regal, AMC and Cinemark refuse to designate their screens for films that’ll soon be on streaming. The chains can afford to rebuff Netflix’s demands because traditional studios like Warner Bros., Disney, Universal, Paramount and Sony provide them with a steady stream of supply with hefty theatrical windows.
But if Netflix buys Warner Bros. and decides, say, “The Batman: Part II” or the new “Lord of the Rings” movie will be streaming after 17 days and theaters can take the film or leave it, that would severely undercut ticket sales and upend the entire business model. Fewer people show up at the theater, fewer people buy concessions, some theaters start closing and the pain is felt in every corner of the industry as the revenue-driving box office declines at every other major studio while consumers get used to staying home.
One filmmaker told TheWrap that it’s “already impossible” to get projects made in the current Hollywood landscape, and Netflix’s Warner Bros. acquisition will be “the killing blow” to hundreds of careers.
And what becomes of Warner Bros.’ slate? While Sarandos didn’t explicitly state whether the number of releases from WB would increase, decrease or stay the same under Netflix, recent history indicates that number will be fewer, regardless of whether they’re theatrical or streaming titles. 20th Century Fox released between 12-17 movies each year between 2013 and 2018. But after being absorbed into Disney as 20th Century Studios, it has never released more than five films in a single year. Just four 20th Century films are currently slated for release in 2026, with a fifth expected to join the slate soon.
Does a movie like “Weapons” get a theatrical release under Netflix ownership? Does it even get made? New Line’s horror output under Warner Bros. has been key to a successful slate under Mike De Luca and Pam Abdy, balancing box office singles and doubles like “Final Destination: Bloodlines” and “The Conjuring: Last Rites” with expensive prestige swings like “Sinners” and “One Battle After Another.”
Does “Sinners” become the buzzy phenomenon that it became without a substantial theatrical release? Ryan Coogler’s R-rated original film grossed over $367 million worldwide and is in the thick of the awards race.
The deal, of course, has to make it through Donald Trump’s Department of Justice first, a hurdle that one top talent agent thinks could be insurmountable given Trump’s preference to a Paramount deal with Netflix and friendship with Larry Ellison.
Senator Elizabeth Warren (D-MA) called the acquisition an “anti-monopoly nightmare,” theater owner group Cinema United said it poses an “unprecedented threat” and one filmmaker who wished not to be named said it’s “apocalyptic.”
“I find it very hard to believe that the Trump Administration will not block this,” the agent told TheWrap, speaking on the condition of anonymity. “You don’t think Larry Ellison is talking to Trump now?”
In addition to Warren, Sen. Bernie Sanders (I-VT) came out strongly against the deal on Friday. “This is not just another corporate merger. This is about the growing, out-of-control concentration of ownership over the media,” he said, calling on the Justice Department to “step up” and “enforce our antitrust laws.”
Sharon Waxman, Drew Taylor and Umberto Gonzalez contributed to this story.
