Ted Sarandos Defends Netflix-Warner Bros. Deal at Senate: Promises More Content for Less
Ted Sarandos, co-CEO of Netflix, recently testified at a Senate hearing regarding the company’s $83 billion acquisition of Warner Bros. His remarks came amid concerns from lawmakers about the deal’s implications for competition, jobs, and streaming prices.
Senate Hearing on Netflix-Warner Bros. Deal
The Senate Judiciary Committee’s Subcommittee on Antitrust held a hearing titled “Examining the Competitive Impact of the Proposed Netflix-Warner Brothers Transaction.” This session lasted just over two hours.
Concerns Raised by Lawmakers
- Senator Mike Lee (R-Utah), the subcommittee chair, expressed antitrust concerns.
- He warned that Netflix’s acquisition could disadvantage its rivals by limiting content licensing.
- Senator Cory Booker (D-New Jersey) highlighted fears regarding job losses in Hollywood due to reduced film and TV productions.
According to Lee, the deal could potentially allow Netflix to dominate the streaming landscape. Sarandos countered, arguing that the combination would enhance the American entertainment industry.
Economic Impact of Netflix
Sarandos claimed that Netflix’s original productions have created 155,000 jobs across all 50 states. Furthermore, the company has contributed over $225 billion to the U.S. economy in the past decade.
Strategic Goals of the Acquisition
Sarandos emphasized that the Warner Bros. businesses are distinct from Netflix and that they plan to operate them largely as they do now. He stated, “We’re buying a company that has assets we do not.” Netflix aims to maintain a 45-day theatrical window for Warner Bros. movies.
Competition and Market Share
- In December, Netflix accounted for 9% of U.S. TV viewership.
- Combined with HBO Max, this figure could rise to 10%.
- Netflix’s share among premium streaming services stands at 18%, while HBO Max has 3%, totaling about 21% if merged.
Notably, Sarandos pointed out that they aim to deliver more content at lower prices. He insists that competition from other tech giants is intensifying.
Addressing Content Concerns
The hearing also featured discussions surrounding Netflix’s content strategy. Lawmakers expressed skepticism regarding the potential proliferation of ideological content. Sarandos defended Netflix, asserting the company aims to entertain a diverse audience and has no political agenda.
Pricing Strategies and Consumer Choices
Sarandos responded to questions about affordability after raising subscription prices last year, noting that competition remains fierce. He stated, “Consumers can vote with their wallets; we are a one-click cancel.” Sarandos also provided compelling data:
- Netflix users spend approximately 35 cents per hour of viewed content.
- For comparison, Paramount+ users spend over 90 cents per hour.
Next Steps for Netflix and Warner Bros.
Both companies are proactively engaging with antitrust regulators in the U.S. and Europe to advocate for the deal. Sarandos expressed confidence that the deal would undergo appropriate scrutiny.
The discussions continue as the streaming landscape evolves, with Netflix aiming to enhance its market presence while addressing the concerns raised by lawmakers and industry stakeholders.
