Dec 15 (Reuters) – Netflix’s decision to acquire assets from Warner Bros. Discovery has not changed, co-Chief Executives Greg Peters and Ted Sarandos said in a letter to employees on Monday.
The streaming giant won over Warner Bros. earlier this month in a $72 billion equity deal for its television, movie studio and streaming assets, following Paramount’s $108.4 billion hostile corporate takeover of the entire company.
Netflix is ​​committed to theatrical distribution of Warner Bros. films, calling it “an important part of their business and legacy.”
“We have not prioritized the theatrical business in the past because it is not our Netflix business. When this deal closes, we will get involved in that business,” the letter said, adding that a hostile takeover by Paramount Skydance was “completely expected.”
Despite growing concerns about tight regulatory scrutiny, Netflix is ​​confident of getting the green light, arguing that the deal is necessary to compete with YouTube’s dominance.
But lawyers say the Justice Department is unlikely to view Netflix and YouTube as interchangeable competitors, given their different content, audiences and business models.
“Even after merging with Warner Bros., our U.S. viewership would only rise from 8% to 9%, still well behind YouTube (13%) and the potential Paramount/WBD combination (14%),” Netflix said in the letter.
The company said the deal would not result in studio closures amid concerns about job losses due to the rise of artificial intelligence. Paramount has also said it has no plans to cut its content budget and instead plans to run its two studio divisions separately.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Arun Koyyur)
