Netflix Co-CEOs Downplay Impact of WBD Deal on Entertainment Industry

Key Takeaways

• The Netflix co-CEOs, Ted Sarandos and Greg Peters, believe the Warner Bros. Discovery deal is a positive development for the entertainment industry, not a negative one.
• The deal is expected to bring growth and strengthen one of Hollywood’s most iconic studios, supporting jobs and ensuring a healthy future for film and TV production.
• Netflix is committed to releasing Warner Bros. movies in theaters and plans to continue the traditional release model.
• The company is confident in its ability to secure regulatory approval for the deal, despite Paramount’s hostile bid.
• The deal is expected to create and protect jobs in the industry, and Netflix is excited about the opportunities it presents.

Introduction to the Deal
The recent announcement of the Warner Bros. Discovery deal has sparked a lot of discussion and speculation within the entertainment industry. Netflix co-CEOs Ted Sarandos and Greg Peters have addressed some of the frequently asked questions from staffers, providing insight into the company’s perspective on the deal. In a staff memo, they emphasized that the $82.7 billion deal is "not the end" of the entertainment industry, but rather a positive development that will bring growth and opportunities. They noted that Warner Bros. brings businesses and capabilities that Netflix does not have, and the deal will strengthen one of Hollywood’s most iconic studios, supporting jobs and ensuring a healthy future for film and TV production.

The Future of Theatrical Releases
One of the concerns surrounding the deal is the potential impact on theatrical releases. However, Sarandos and Peters reassured staffers that Netflix is committed to releasing Warner Bros. movies in theaters, just as they do today. They emphasized that theatrical releases are an important part of Warner Bros.’ business and legacy, and they do not want to change what makes the studio so valuable. They also noted that if the deal had happened two years ago, hits like "Minecraft" and "Superman" would still have premiered on the big screen, and that’s how they plan to keep it. This suggests that Netflix plans to maintain the traditional release model, where movies are first released in theaters before becoming available on streaming platforms.

Evolution of Release Windows
Sarandos had previously confirmed that Netflix would still be supporting WB’s movie theater output, though he noted that the release windows will evolve. This suggests that while the traditional release model will be maintained, there may be some changes to the way movies are released and distributed. For example, Netflix may experiment with simultaneous releases in theaters and on its streaming platform, or it may adjust the timing of releases to better suit its business model. However, the company’s commitment to theatrical releases suggests that it values the importance of the big screen experience and plans to continue supporting it.

Paramount’s Hostile Bid
The Netflix co-CEOs also addressed Paramount’s hostile bid for Warner Bros. Discovery, reiterating their confidence in Netflix’s eventual regulatory approval. They noted that the bid was "entirely expected," but emphasized that they have a solid deal in place that is great for shareholders, consumers, and the industry as a whole. They expressed confidence that they will be able to secure regulatory approval and complete the deal, and are excited about the opportunities it presents. This suggests that Netflix is not intimidated by Paramount’s bid and is confident in its ability to navigate the regulatory process and emerge successful.

Conclusion and Future Outlook
In conclusion, the Warner Bros. Discovery deal is a significant development for the entertainment industry, and Netflix’s co-CEOs are optimistic about its potential. They believe the deal will bring growth, support jobs, and ensure a healthy future for film and TV production. While there may be some changes to the way movies are released and distributed, Netflix is committed to maintaining the traditional release model and supporting theatrical releases. With its confidence in regulatory approval and its excitement about the opportunities presented by the deal, Netflix is well-positioned to navigate the changing landscape of the entertainment industry and emerge as a leader in the years to come.