There is concern that subscribers might be negatively affected if Netflix acquires Warner Bros. Discovery’s streaming and movie studios businesses. One of the biggest fears is that the merger would lead to higher prices due to less competition for Netflix.
During a US Senate hearing Tuesday, Netflix co-CEO Ted Sarandos suggested that the merger would have an opposite effect.
Sarandos was speaking at a hearing held by the US Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights, “Examining the Competitive Impact of the Proposed Netflix-Warner Brothers Transaction.”
Sarandos aimed to convince the subcommittee that Netflix wouldn’t become a monopoly in streaming or in movie and TV production if regulators allowed its acquisition to close. Netflix is the largest subscription video-on-demand provider by subscribers (301.63 million as of January 2025), and Warner Bros. Discovery is the third (128 million streaming subscribers, including users of HBO Max and, to a smaller degree, Discovery+).
Speaking at the hearing, Sarandos said: “Netflix and Warner Bros. both have streaming services, but they are very complementary. In fact, 80 percent of HBO Max subscribers also subscribe to Netflix. We will give consumers more content for less.”
During the hearing, Democratic senator Amy Klobuchar of Minnesota asked Sarandos how Netflix can ensure that streaming remains “affordable” after a merger, especially after Netflix issued a price hike in January 2025 despite adding more subscribers.
Sarandos said the streaming industry is still competitive. The executive claimed that previous Netflix price hikes have come with “a lot more value” for subscribers.
“We are a one-click cancel, so if the consumer says, ‘That’s too much for what I’m getting,’ they can cancel with one click,” Sarandos said.
When pressed further on pricing, the executive argued that the merger doesn’t pose “any concentration risk” and that Netflix is working with the US Department of Justice on potential guardrails against more price hikes.
Sarandos claimed that the merger would “create more value for consumers.” However, his idea of value isn’t just about how much subscribers pay to stream but about content quality. By his calculations, which he provided without further details, Netflix subscribers spend an average of 35 cents per hour of content watched, compared to 90 cents for Paramount+.
... continue reading