It has been a gigantic year for Warner Bros., grossing over $4B with such hit films as Sinners, Weapons, and Superman. And what’s the studio’s reward for this? Being bought by Netflix, that’s what. Officially, Netflix acquired Warner Bros., including film and television assets HBO and HBO MAX, defeating bids from Paramount Skydance, and Comcast.
The acquisition is valued at $82.75B.
This is a potentially seismic shift, as theater exhibitors and studios worry that another major avenue of theatrical releases is vanishing. Netflix head Ted Sarandos began by saying he “expects” to still give Warner Bros. films a theatrical release window. He referenced the 30 films that Netflix did release in theaters this year, however, he excluded that virtually all of them were for two weeks or less.
“It’s not like we have this opposition to movies into theaters,” Sarandos said. “My pushback has been mostly in the fact of the long exclusive windows, which we don’t really think are that consumer-friendly, but when we talk about keeping HBO operating, largely as it is, that also includes their output movie deal with Warner Bros., which includes a life cycle that starts in the movie theater, which we’re going to continue to support.”
But even that seems to have been too much of a commitment. Sarandos later added during the conference call…
“I wouldn’t look at this as a change in approach for Netflix movies or for Warner movies,” he said. “I think, over time, the windows will evolve to be much more consumer friendly, to be able to meet the audience where they are quicker … I’d say right now, you should count on everything that is planned on going to the theater through Warner Bros. will continue to go to the theaters through Warner Bros., and Netflix movies will take the same strides they have, which is, some of them do have a short run in the theater beforehand. But our primary goal is to bring first-run movies to our members, because that’s what they’re looking for.”
That last part, “our primary goal is to bring first-run movies to our members” sounds like streaming is still the priority going forward. Ouch.
There are still significant obstacles. Overseas deals still need approval. And of course, there’s the potential hurdle of Trump’s government which will need to greenlight the deal. Sarandos said he’s “highly confident in the regulatory process”, but we know Trump favors Paramount. I’m sure this timing is coincidental, but Trump’s DOJ is reportedly opening a sweeping antitrust investigation into Netflix. A group of concerned producers and filmmakers, many of them A-listers, have also reached out to Congress with its concerns.
It remains to be seen what happens to entities such as DC Studios, HBO, or All Elite Wrestling. James Gunn and Peter Safran co-chair DC Studios and have multiple superhero films on the way. Will they retain control? Will their films still get multi-week theatrical windows? Will HBO be allowed to operate independently?
Lots of questions are swirling right now.
