Just when everyone thought that Netflix was finally getting its hands on Warner Bros. Discovery, Paramount decided to step in and make things more complicated for its rival.
Radio IULM had the pleasure to interview Elena Neira, Professor of Communication Studies at the UOC (Universitat Oberta de Catalunya), and a leading expert on streaming and new audiovisual distribution models. Author of several key books on the streaming revolution, she’s named by Forbes as one of the 50 most influential women in the Spanish audiovisual industry.

Interview: Elena Neira

From your perspective, what does the Netflix attempt to acquire Warner Bros. tell us about the current state of the streaming industry? 

I think we shouldn’t say that Netflix wanted to buy Warner Bros. It just came up as an opportunity. The first bidder in Warner Bros. Discovery was actually Paramount, and it was a solo offer. But after that, Warner Bros. Discovery decided to open the bid for every other player, and Netflix came as a potential buyer for Warner Bros Discovery.
I would say that Netflix is evolving. Netflix is no longer a company, a streaming company, as such. They want to evolve. They are like, actually, a pretty legacy media, actually. They have these mini Disneylands working in the United States. They bought a few malls, and they have a lot of physical experiences. They have video games. They are broadcasting certain TV shows. So we can no longer see Netflix as a streaming player, as a pure streaming player. They want to evolve. And Warner has a lot of benefits for their portfolio, on not only the franchises, which are very valuable, but also the theatrical business, because they are not into the theatrical business. So it would be a very interesting evolution from the original model of Netflix to the actual model.

So do you believe that Netflix is maybe trying to shift from a more tech company identity to our traditional Hollywood studio identity?

I would say that Netflix has a peculiar limitation. They don’t have any franchises, but they own. They have Stranger Things, of course. They have Wednesday. They have Monster. They have Bridgerton. But there are only a few franchises. If they’re by Warner Bros. Discovery, they’re going to put their hands into such a valuable library of content. And as their owners, they can develop more shows. And also, they wouldn’t have to license shows anymore, because they will own them. So I would say that they are still a tech company, but they see the benefits from acquiring a company such as Warner Bros. Discovery. 

So do you believe this is a sign of strength for Netflix, rather than maybe a sign of pressure in this really competitive market? 

Yes. I think Netflix is in a very well position. They are the absolute leader in terms of market share, in terms of cultural impact in our lives. I would say that no other shows like Netflix’s are capable to drive these cultural phenomena around their shows. It’s very obvious that nor Disney+, nor HBO Max can make the conversation around their shows as intense as Netflix does. So I would say it’s a very interesting evolution. It’s going to be very hard for Netflix to actually buy Warner Bros. Discovery, as you know. But I would say that they’re going to try their best in order to secure it because it would make perfect sense at this point to evolve into a different kind of company. Now they have the knowledge and the advantage in the streaming area. Why not evolve into the theatrical experience, for instance? 

You talked about Paramount previous offers. Do you think that this counter offer, that came just after Netflix publicly announced wanting to buy Warner Bros., was a defensive move or some renewed ambition?

I would say Paramount is an ego battle because they were the first one to put an offer in front of Warner Bros. Discovery when no one wanted to buy Warner Bros. Discovery. And then Warner decided to open the bid to other players. And right now, Paramount is run by a very peculiar guy, a very wealthy family. And they have this close relationship with the Trump administration. And I think they were pretty confident about the acquisition going forward. They didn’t, I’m pretty sure reading the messages that David Ellison sent to David Susslund, the CEO of Warner, you could tell that he wasn’t very happy and the Netflix announcement took him by surprise. So I would say right now, Paramount wants, no matter what, to buy Warner Bros. Discovery. And I would say that Paramount hasn’t set a good environment to a negotiation because they are going hostile. And that’s not a friendly negotiation with another company.

So do you believe the political pressure around the situation can change the situation, maybe block, delay or shape it in another way?

It probably will. I would say that the main difference between the Paramount offer and Netflix offer, besides the price, the price tag, is that Paramount is willing to buy the global networks, the TV stations. And as you know, TV stations are very important right now for the Trump administration, especially CNN, which is a news outlet, a very influential news outlet. And the Ellison’s have been very clear about running things differently in CNN, which is for me personally, I find it terrifying. It shouldn’t be that way. News channels shouldn’t be run. But someone that openly says that it’s going to favor one side or another of the government. And I would say, yes, Trump can authorize the buy by himself, but he can definitely influence all the process. And he can definitely make Netflix offer harder to get through. 

Let’s try to maybe look ahead. Do you believe that we’re moving toward a big three global streaming ecosystem where medium sized platforms won’t be able to survive? Or do you think there will still be place for them?

I would say that that was that’s one of the main issues with this consolidation. Yes, the streaming landscape is escalating globally. So it’s hard for medium or little or small companies going to be harder to even have a chance to get some users for their companies. I would say that Netflix has been very smart because they’ve been very clear about this is they’re going to face the acquisition. So in phase one and two, they’re not going to merge the services. Both services, HBO Max and Netflix would operate independently. And eventually they would use HBO Max as an add. So you would pay extra in order to access HBO Max. And I think that’s a very smart position because that somehow preserves HBO Max as the prestige TV outlet and lets Netflix to manage the commercial stuff. The popular, the popularity stuff. So I would say it’s bad in terms of market, but I would say it’s going to be kind of maybe good for the users. Just one but to the operation, which is in terms of pricing, because if you have such a huge market share, probably they’re going to rise the price we are already paying for those platforms.

We’re talking about users and viewers. So what do you think it would be the best case scenario at the end of this entire situation for the users? 

I would say I’m not very neutral in this question. I’ve been studying Netflix for a long time, and I just can’t imagine how their technology and their the way they understand streaming can take Warner Bros IP to the next level. I’m sure they don’t know much about the theatrical businesses, but I’m sure they’re going to keep the workforce. So I don’t think they’re going to have any problem in regarding the theatrical production, just only in terms of how long the movies are going to stay in the theaters. That’s not a question. But in terms of how TV shows, how franchises, how new shows can reach different audiences, I think it’s a huge opportunity to HBO Max, which has been living for decades. As you know, the prestige TV. But I think they have to evolve to connect with the younger audiences, such as yourself, into another different level. Because we are separated by several generations, and we perceive and we find attractive different things. So I think definitely HBO Max needs to evolve and needs to connect to the users at a very different level. I think Netflix definitely can help with that. 

_{Immagine in evidenza: freepik}