Make the case that ANY mergers of sufficiently large profitable firms are good for the public. Because I wonder if we’d be better off had we denied most for the last 3 decades.
For some reason, the audio cuts off at the sentence, “But I think Paramount would be inclined to continue with the current corporate strategy of “managed decline,” while Netflix would accelerate it.”
As someone whose husband works in the film industry (and who used to be in it myself), I'd really rather have WB stay independent for the sake of consumers. The main reason I say this is because of Disney's takeover of Fox.
Disney and Fox used to have opposite pitch philosophies: Disney would basically only take sure bets with merchandising opportunities. Fox would throw money at a lot of things and hope for the best. This meant that Fox made a lot of bad movies, but they also made a lot of good movies that weren't obvious they would be great from the pitch, like Melissa McCarthy's "Spy". After Fox got bought, they're basically stuck with Disney's philosophy, and it means there are fewer big quirky movies out there. This is also a very niche complaint, but they also raised the booking fee for the Rocky Horror Picture Show, which has caused a lot of midnight showings that went on for decades to collapse.
WB and Paramount are closer together in philosophy, but not in working styles. This is going to sound super vibes-based, but WB has a very bro-ish culture, whereas Paramount is a bunch of procrastinating perfectionists. I'm sure more than half the movies they each made this year would've still gotten through the pitch meetings if they'd been owned by the other, but it's the less obvious half for each that I'm not sure about. Would Paramount have made Sinners or Weapons? I'm not sure.
But at least Paramount actually believes in theatrical release! Netflix is only doing the minimum releases it can get away with to qualify for awards. *Any* other studio would've put Kpop Demon Hunters in the theaters for a good 6 months. It was popular enough to do months on end of sing-along bookings all across America, where America's children could've bonded by singing "Golden" together the way they all went insane for "Let It Go" when Frozen was in theaters for an eternity. But Netflix hates theaters, so they ran it for 2 weeks and then they were done. I genuinely think this was an outright disservice to America.
So overall, I wish we had a government that would be willing to block any other studio buying WB.
There might be viable antitrust case if the market is defined as "anticipated blockbuster movies." This kind of market definition was successful in the Bertelsmann antitrust case that arose from them trying to buy Simon & Schuster. It is basically an argument about monopsony power.
I think Matt is right that the correct frame for this discussion is not Netflix versus Paramount versus HBO Max, but rather YouTube, Reels and TikTok versus every other way you can spend your time.
The thriller writer Matthew Reilly has said in author talks that he knows critics hate his books, but he aims to be as thrilling to read as watching an action movie or playing Call of Duty. And he is right. The market for these kinds of discretionary products needs to be thought of as "everyday leisure" and not siloed into different product categories. Unfortunately, free algorithmically delivered short form vertical videos seem to hack the dopamine system in a way that lets them outcompete every other way of spending your time. And we are getting more evidence that this kind of media consumption has negative effects on attention and impulse control in users' broader lives.
Anything that improves the ability of long form entertainment to compete with TikTok and similar platforms is good. That includes not only consolidation of traditional media, but also social media bans for under 16s, punitive taxes on digital advertising, and subsidies for local performing arts.
I want whichever option gets the rest of Zack Snyder's Justice League trilogy completed, I can't believe WB botched that so bad and replaced it with James Gunn's craptacular version of DC. My dream has a 0.0001% of happening in either case, but I'm not giving up hope.
One additional point brought up by Ben Thompson last week (https://stratechery.com/2025/netflix-and-the-hollywood-end-game/) is that Netflix actually enhances some of its catalog which finds a new life on streaming. Suits was a solid show on cable, but on Netflix it got introduced to a whole new audience which made the actual IP more valuable. By trying to buy a bigger catalog, Netflix is partially trying to capture some of the value it is able to generate for other IPs.
AOL purchased Warner and died. Warner split into a cable company and died. ATT purchased what was left of warner cable and spit it out into a separate company (before the cable company imploded). Now Netflix thinks buying Warner is a good idea. I think that Warner is the monkey paw ...bye Netflix :-)
The benefit to Netflix is a lot more straightforward than those other mergers, provided the money isn't too dear. Just massively boosting their content catalog is a huge boon.
Who has standing to sue if Trump sends farmers bail out money that is not explicitly approved by congress? I know farmers are a sympathetic in-group and it would be suicidal for Democrats to be seen as opposing illegal money being sent to sympathetic in-groups. I would not recommend that they commit political suicide for the sake of principles given all the other criminal activity already occurring.
Isn't there some kind of private sector tax payer advocacy group that would try to sue if a Dem tried to pull something like this? Didn't Cato sue Biden for his student debt executive actions?
Officially the entity suing over that was an arm of the Missouri state government which had a (rather contrived, but all of standing law is completely made up anyway) claim that it was injured which in turn gave the state a very thin injury theory.
I think “videos you can watch” is really bad way to frame this market. To me that's the equivalent to saying that Slow Boring is competing in the "things you can read" market or that beef is competing with carrots in the "things you can eat" market. That's way too broad to be a useful way to do any analysis (antitrust or otherwise) of the business world. I think that there are plenty of pretentious CEOs who WANT it to be the case that they're competing for such a broadly defined 'marketplace', but that doesn't make it true. The revenue models are different (i.e. advertising vs monthly subscription), the method of productions are different (i.e. user-created content vs expensive, fixed cost professional production), distribution, etc.
I also think MY is really underselling the concern or misunderstanding the criticism of movies in theaters with Netflix.
As while Netflix says they are open to keeping WB movies in theaters, they’re not gonna commit to the usual 45+ days. They definitely want to do 2-3 weeks as they usually do before moving it quick to Netflix.
Edit: would recommend the podcast “The town by Matthew belloni”. I would argue he covers the business of this merger better than MY. I also would criticize MY for proactively being stubborn or “anti” anti-trust on business mergers.
as a general comment: a situation in which theaters have shorter release windows for a bigger slate of movies (followed by those movies being available online) would be a win in my book.
Fair enough. I would recommend the podcast as the podcaster argues , and it think he’s right, that theaters can be used to promote/market movies. Especially franchises.
Netflix is desperately trying to create franchises. And as many here pointed out, a lot of their selection can be bad or forgettable. Which is why they’re hoping that WB franchises will help.
But I would argue that if they’re not taking the needed steps to caretaker or grow franchises, that despite their best efforts they will continue to struggle.
I think monopoly law is one of the few places where I have significant disagreements with Matt, even if I agree with him that the Matt Stoller crowd are inconsistent and don't have a clear theory of the case. To take two of his main "it's not a monopoly" arguments:
- "there's other competition for eyeballs" - I think monopolies are real even if adjacent markets have competition! If Doordash wanted to buy Uber Eats, we'd yell about a company gaining 80%+ share of the delivery market, even though eat-in restaurants and meal-delivery-kits are still competing in the broader "food for your mouth" market. When I want to watch a show, I'm sitting down in front of my large TV and looking at my Roku streaming channels- I'm picking Netflix, HBO, Prime, Disney, or Apple TV, and YouTube and TikTok aren't options. Maybe I'm the outlier given younger generations' viewing habits... but not that much, I don't think!
- "there are other competitors" - I think if he's saying "the combined Netflix + WB streaming market would still be only ~40% of the market and that's not that high" I get it to some extent, but sometimes I feel like he treats the existence of other viable competitors as prima facie evidence of not-a-monopoly, even if the supposed monopoly has 60%+ market share. At that level of market share, you do genuinely have market power, which *does* have bad effects for consumers, even if it's indirect. If you were able to somehow credibly promise that "I will have 75% of the streaming market for the next 5 years but will not raise real prices on the consumer during that time" I think you'd still be worried as a consumer. What will NetflixWB be able to squeeze out of content producers even as they hold consumer prices constant? Will we see eventual consolidation in content producers that has knock-on effects for TV quality?
I guess I am still willing to go with the consumer welfare standard, but it feels like in the past it's been applied in a naive way, not accounting for the indirect way that a monopolist's market power vis-a-vis its suppliers could either lower product quality or let the company raise prices later on. I'm willing to be convinced either way on this because I haven't read extensively, but I do sometimes get a dismissive vibe from Matt Y when he talks about monopolies.
You should get a different streaming device. Youtube is far and away the leader in minutes watched, and growing. They also realize that they're being watched on hardware TVs more and more and are catering to the format.
YouTube is now my only paid TV-like service, and I almost couldn't be happier. There's some absolutely banger content on the platform, you just need to curate the hashtag #algorithm carefully and do a test-watch in a private browser if you want to check out a new channel that you think might poison the recommendations.
Although, I worry that AI-generated slop will ruin or at least badly shittify the platform.
I had a shower leak once, now I still occasionally watch this contractor in California tearing down a shower to figure out why it leaked and the various pros and cons of waterproofing products.
"I feel like he treats the existence of other viable competitors as prima facie evidence of not-a-monopoly, even if the supposed monopoly has 60%+ market share."
My sense is to Matt words matter. A monopoly is a price-maker with a steep demand curve. That's it. Duopolies aren't even price-makers. Oligopolies competing with brand differentiated products are certainly not price-makers. Your example is correctly and definitionally just not-a-monopoly.
But oligopolies collude to fix (and, in practice, raise) prices all the time. The whole point of "antitrust" is to prevent oligopolies from forming trusts! If you look at the behavior that led Congress to pass the Sherman and Clayton Acts, the point was to try to prevent large industry players from building monopoly control by coordinating their actions.
"But oligopolies collude to fix (and, in practice, raise) prices all the time."
They do not. If that were true, our jails would be filled. Hell ... we can't even attend the same events as our competitors much less actually talk to them.
The mention of theaters really looking for things to show reminded me of the recent announcement of popular youtuber Markiplier's (Mark Fischbach) feature film "Iron Lung," which was initially only going to about 60 small indie theaters but has since been picked up by AMC and Regal and can now be seen basically anywhere in the US
Make the case that ANY mergers of sufficiently large profitable firms are good for the public. Because I wonder if we’d be better off had we denied most for the last 3 decades.
All I care about is which is most likely to result in a "Baroque Cycle" streaming series
I think Trump likes having CNN as a foil tbh
For some reason, the audio cuts off at the sentence, “But I think Paramount would be inclined to continue with the current corporate strategy of “managed decline,” while Netflix would accelerate it.”
As someone whose husband works in the film industry (and who used to be in it myself), I'd really rather have WB stay independent for the sake of consumers. The main reason I say this is because of Disney's takeover of Fox.
Disney and Fox used to have opposite pitch philosophies: Disney would basically only take sure bets with merchandising opportunities. Fox would throw money at a lot of things and hope for the best. This meant that Fox made a lot of bad movies, but they also made a lot of good movies that weren't obvious they would be great from the pitch, like Melissa McCarthy's "Spy". After Fox got bought, they're basically stuck with Disney's philosophy, and it means there are fewer big quirky movies out there. This is also a very niche complaint, but they also raised the booking fee for the Rocky Horror Picture Show, which has caused a lot of midnight showings that went on for decades to collapse.
WB and Paramount are closer together in philosophy, but not in working styles. This is going to sound super vibes-based, but WB has a very bro-ish culture, whereas Paramount is a bunch of procrastinating perfectionists. I'm sure more than half the movies they each made this year would've still gotten through the pitch meetings if they'd been owned by the other, but it's the less obvious half for each that I'm not sure about. Would Paramount have made Sinners or Weapons? I'm not sure.
But at least Paramount actually believes in theatrical release! Netflix is only doing the minimum releases it can get away with to qualify for awards. *Any* other studio would've put Kpop Demon Hunters in the theaters for a good 6 months. It was popular enough to do months on end of sing-along bookings all across America, where America's children could've bonded by singing "Golden" together the way they all went insane for "Let It Go" when Frozen was in theaters for an eternity. But Netflix hates theaters, so they ran it for 2 weeks and then they were done. I genuinely think this was an outright disservice to America.
So overall, I wish we had a government that would be willing to block any other studio buying WB.
There might be viable antitrust case if the market is defined as "anticipated blockbuster movies." This kind of market definition was successful in the Bertelsmann antitrust case that arose from them trying to buy Simon & Schuster. It is basically an argument about monopsony power.
I think Matt is right that the correct frame for this discussion is not Netflix versus Paramount versus HBO Max, but rather YouTube, Reels and TikTok versus every other way you can spend your time.
The thriller writer Matthew Reilly has said in author talks that he knows critics hate his books, but he aims to be as thrilling to read as watching an action movie or playing Call of Duty. And he is right. The market for these kinds of discretionary products needs to be thought of as "everyday leisure" and not siloed into different product categories. Unfortunately, free algorithmically delivered short form vertical videos seem to hack the dopamine system in a way that lets them outcompete every other way of spending your time. And we are getting more evidence that this kind of media consumption has negative effects on attention and impulse control in users' broader lives.
Anything that improves the ability of long form entertainment to compete with TikTok and similar platforms is good. That includes not only consolidation of traditional media, but also social media bans for under 16s, punitive taxes on digital advertising, and subsidies for local performing arts.
I want whichever option gets the rest of Zack Snyder's Justice League trilogy completed, I can't believe WB botched that so bad and replaced it with James Gunn's craptacular version of DC. My dream has a 0.0001% of happening in either case, but I'm not giving up hope.
One additional point brought up by Ben Thompson last week (https://stratechery.com/2025/netflix-and-the-hollywood-end-game/) is that Netflix actually enhances some of its catalog which finds a new life on streaming. Suits was a solid show on cable, but on Netflix it got introduced to a whole new audience which made the actual IP more valuable. By trying to buy a bigger catalog, Netflix is partially trying to capture some of the value it is able to generate for other IPs.
AOL purchased Warner and died. Warner split into a cable company and died. ATT purchased what was left of warner cable and spit it out into a separate company (before the cable company imploded). Now Netflix thinks buying Warner is a good idea. I think that Warner is the monkey paw ...bye Netflix :-)
The benefit to Netflix is a lot more straightforward than those other mergers, provided the money isn't too dear. Just massively boosting their content catalog is a huge boon.
Who has standing to sue if Trump sends farmers bail out money that is not explicitly approved by congress? I know farmers are a sympathetic in-group and it would be suicidal for Democrats to be seen as opposing illegal money being sent to sympathetic in-groups. I would not recommend that they commit political suicide for the sake of principles given all the other criminal activity already occurring.
In theory GAO is supposed to sue to stop that sort of thing, IIRC.
In practice they never do; yet another pretend watchdog institution that has failed at the first serious test.
Isn't there some kind of private sector tax payer advocacy group that would try to sue if a Dem tried to pull something like this? Didn't Cato sue Biden for his student debt executive actions?
Officially the entity suing over that was an arm of the Missouri state government which had a (rather contrived, but all of standing law is completely made up anyway) claim that it was injured which in turn gave the state a very thin injury theory.
I think “videos you can watch” is really bad way to frame this market. To me that's the equivalent to saying that Slow Boring is competing in the "things you can read" market or that beef is competing with carrots in the "things you can eat" market. That's way too broad to be a useful way to do any analysis (antitrust or otherwise) of the business world. I think that there are plenty of pretentious CEOs who WANT it to be the case that they're competing for such a broadly defined 'marketplace', but that doesn't make it true. The revenue models are different (i.e. advertising vs monthly subscription), the method of productions are different (i.e. user-created content vs expensive, fixed cost professional production), distribution, etc.
I also think MY is really underselling the concern or misunderstanding the criticism of movies in theaters with Netflix.
As while Netflix says they are open to keeping WB movies in theaters, they’re not gonna commit to the usual 45+ days. They definitely want to do 2-3 weeks as they usually do before moving it quick to Netflix.
Edit: would recommend the podcast “The town by Matthew belloni”. I would argue he covers the business of this merger better than MY. I also would criticize MY for proactively being stubborn or “anti” anti-trust on business mergers.
as a general comment: a situation in which theaters have shorter release windows for a bigger slate of movies (followed by those movies being available online) would be a win in my book.
Fair enough. I would recommend the podcast as the podcaster argues , and it think he’s right, that theaters can be used to promote/market movies. Especially franchises.
Netflix is desperately trying to create franchises. And as many here pointed out, a lot of their selection can be bad or forgettable. Which is why they’re hoping that WB franchises will help.
But I would argue that if they’re not taking the needed steps to caretaker or grow franchises, that despite their best efforts they will continue to struggle.
I’m confused as to how, at least form a shallow level, how anti trust leftists would be useful idiots in this situation.
Since they would be opposed to both possible outcomes (Netflix or paramount buys WB)?
I think monopoly law is one of the few places where I have significant disagreements with Matt, even if I agree with him that the Matt Stoller crowd are inconsistent and don't have a clear theory of the case. To take two of his main "it's not a monopoly" arguments:
- "there's other competition for eyeballs" - I think monopolies are real even if adjacent markets have competition! If Doordash wanted to buy Uber Eats, we'd yell about a company gaining 80%+ share of the delivery market, even though eat-in restaurants and meal-delivery-kits are still competing in the broader "food for your mouth" market. When I want to watch a show, I'm sitting down in front of my large TV and looking at my Roku streaming channels- I'm picking Netflix, HBO, Prime, Disney, or Apple TV, and YouTube and TikTok aren't options. Maybe I'm the outlier given younger generations' viewing habits... but not that much, I don't think!
- "there are other competitors" - I think if he's saying "the combined Netflix + WB streaming market would still be only ~40% of the market and that's not that high" I get it to some extent, but sometimes I feel like he treats the existence of other viable competitors as prima facie evidence of not-a-monopoly, even if the supposed monopoly has 60%+ market share. At that level of market share, you do genuinely have market power, which *does* have bad effects for consumers, even if it's indirect. If you were able to somehow credibly promise that "I will have 75% of the streaming market for the next 5 years but will not raise real prices on the consumer during that time" I think you'd still be worried as a consumer. What will NetflixWB be able to squeeze out of content producers even as they hold consumer prices constant? Will we see eventual consolidation in content producers that has knock-on effects for TV quality?
I guess I am still willing to go with the consumer welfare standard, but it feels like in the past it's been applied in a naive way, not accounting for the indirect way that a monopolist's market power vis-a-vis its suppliers could either lower product quality or let the company raise prices later on. I'm willing to be convinced either way on this because I haven't read extensively, but I do sometimes get a dismissive vibe from Matt Y when he talks about monopolies.
" and YouTube and TikTok aren't options"
You should get a different streaming device. Youtube is far and away the leader in minutes watched, and growing. They also realize that they're being watched on hardware TVs more and more and are catering to the format.
YouTube is now my only paid TV-like service, and I almost couldn't be happier. There's some absolutely banger content on the platform, you just need to curate the hashtag #algorithm carefully and do a test-watch in a private browser if you want to check out a new channel that you think might poison the recommendations.
Although, I worry that AI-generated slop will ruin or at least badly shittify the platform.
Yeah , there is long form content on there for my various interests that would have never, never made it on commercial TV.
Trying to imagine Technology Connections pitching a two-hour series on dishwashers to the Discovery Channel or whatever...
I had a shower leak once, now I still occasionally watch this contractor in California tearing down a shower to figure out why it leaked and the various pros and cons of waterproofing products.
Powder dishwasher detergent 4ever.
Preach it.
THE CHEAPEST S*&% YOU CAN FIND
"I feel like he treats the existence of other viable competitors as prima facie evidence of not-a-monopoly, even if the supposed monopoly has 60%+ market share."
My sense is to Matt words matter. A monopoly is a price-maker with a steep demand curve. That's it. Duopolies aren't even price-makers. Oligopolies competing with brand differentiated products are certainly not price-makers. Your example is correctly and definitionally just not-a-monopoly.
But oligopolies collude to fix (and, in practice, raise) prices all the time. The whole point of "antitrust" is to prevent oligopolies from forming trusts! If you look at the behavior that led Congress to pass the Sherman and Clayton Acts, the point was to try to prevent large industry players from building monopoly control by coordinating their actions.
"But oligopolies collude to fix (and, in practice, raise) prices all the time."
They do not. If that were true, our jails would be filled. Hell ... we can't even attend the same events as our competitors much less actually talk to them.
Sure, if you assume existing antitrust law!
Obviously, the 1890 Congress could not assume existing antitrust law because it hadn't been enacted yet.
The mention of theaters really looking for things to show reminded me of the recent announcement of popular youtuber Markiplier's (Mark Fischbach) feature film "Iron Lung," which was initially only going to about 60 small indie theaters but has since been picked up by AMC and Regal and can now be seen basically anywhere in the US