LEILA FADEL, HOST:
President Trump says he will be, quote, "involved" in whether or not federal regulators approve Netflix's plan to buy Warner Bros. Discovery. Netflix announced the $83 billion deal on Friday, which would reshape the entertainment business if it's approved. To break it all down, we're joined by Matt Belloni, founding partner of news site Puck, and author of Puck's What I'm Hearing newsletter. Good morning, and thank you for being on the program.
MATT BELLONI: Thanks for having me.
FADEL: So, Matt, why does Netflix want Warner Bros.?
BELLONI: First, it's a treasure trove of intellectual property, franchises like "Batman," "Superman," "Game of Thrones," I mean, just unbelievable things that Netflix has not been able to create on its own. It does have its own franchises, but it's only been making original movies and TV for about a decade. And then on the streaming side, it would give them the HBO Max streaming service, which has about 130 million subscribers worldwide. So it's a really valuable entity for multiple reasons for Netflix.
FADEL: Now, there's already been a lot of pushback on this merger, from screenwriters to the administration. What's the biggest concern?
BELLONI: Everybody in Hollywood is always wanting more buyers for original film and TV. And if Warner Bros. is sold to Netflix, those are the - two of the bigger buyers in town. And the fear is that it would cause one of them to either go away completely or be severely diminished. But I think on the regulatory side, it really is a question of whether this gives Netflix too much power and how you define the market for what Netflix does. Are they a TV platform? Are they a streamer? Are they a general entertainment company? Are they competing with the Hollywood studios? Are they competing with TikTok? Are they competing with YouTube? So it's a real question of kind of the future of entertainment and whether it's going to be consolidated around a few gigantic companies.
FADEL: Now, Warner Bros. was already going to spin off a bunch of its cable channels. CNN or Discovery, Netflix won't be buying them. And Warner Bros. just bought Discovery a few years ago. I mean, what does this mean for that larger package?
BELLONI: Yeah. The cable channels are being spun off into a new entity that's going to be called Discovery Global, and they could potentially sell off individual networks. So someone comes along and says, I really want to own CNN, they would be willing to do a deal there. It's really a mechanism to take those very profitable yet declining businesses and take them away from the growth businesses, which are streaming and the studio. Netflix was not interested in cable channels. It doesn't want to own CNN, it doesn't want to own linear cable channels. So now they're separating them so that Netflix will have something pure to buy.
FADEL: You pose this question in your newsletter. Is this deal, quote, "definitively the end" of Hollywood as we know it? I mean, what's the answer to that question?
BELLONI: I think the answer is that Hollywood is an evolving concept, and to say that the end of Hollywood is near is a little bit misguided, I think. It just lacks nuance because Hollywood is changing. I mean, Netflix operates so much more like a traditional Hollywood studio than most people realize. Yes, it's a streaming company, and yes, it operates digitally and has done a lot of things differently. But at its core, it is working with traditional filmmakers, television showrunners, writers, directors. And that is just the modern incarnation of a studio.
And I think it's just hard for people in Hollywood to put their heads around that because they're known as this disruptor, and they are the evil empire coming in from Silicon Valley and reshaping the way business is done. And a lot of that is true. But I think it's living in the past for people to think that this traditional Hollywood system was going to go on forever and just kind of ignore the internet.
FADEL: Is more and more of what we consume, where you can go to make creative things just now being put into one hand?
BELLONI: Yes. I mean, this deal would consolidate content production and distribution into the hands of Netflix, and it would take out Warners as an independent buyer and as an independent operator. I mean, we saw this happen when most of Fox was sold to Disney. That took the Hollywood studio system from six down to five. This would take it from five down to four, and there would only be four legacy Hollywood studios remaining. Now, what that fails to account for is that there are three major players now in Hollywood that are just not traditional studios. There's Netflix. There's Amazon Prime Video. And there's Apple TV. All three of those are major buyers and major providers of entertainment. They're just not considered traditional Hollywood studios.
FADEL: That's Puck founding partner Matt Belloni. Thank you so much for your time.
BELLONI: Thank you. Transcript provided by NPR, Copyright NPR.
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