Disney CEO Bob Iger is speaking out leaving little doubt over the dangers he fears that might manifest if a merger between streaming giant Netflix and entertainment giant Warner Bros. Discovery is approved by federal regulators.
While Iger refused to outright state whether or not the proposed Netflix acquisition of Warner Bros. is good or bad, he left little doubt that the deal worries him. In his comments to CNBC on Thursday, Iger noted that regulators should give close scrutiny to the effects such a merger might have on consumers.
“If I were a regulator looking at this combination, I’d look at a few things. First of all, I would look at what the impact is on the consumer,” Iger told CNBC. “Will one company end up with pricing leverage that might be considered a negative or damaging to the consumer, and with a significant amount of streaming subscriptions across the world? Does that ultimately give Netflix pricing leverage over the consumer, that it might not necessarily be healthy?”
He also worried that delivering a theatrical film producer into the hands of a streaming concern might hurt theaters that are already operating with “relatively thin margins.”
“They require, not only volume, but they require interaction with these films and these movie companies that give them the ability to monetize successfully. That’s a very, very important global business,” he explained. “We’ve been certainly participating in it in a very big way, we’ve had 33 $1 billion films in the last 20 years. So we’re mindful of protecting the health of that business. It’s very important to what I’ll call the media ecosystem globally.”
The dichotomy between a streaming giant owning a film studio has been a big worry for many in the entertainment industry, but Netflix CEO Ted Sarandos insisted that if his company takes over Warner he will remain “deeply committed” to releasing films “exactly the way they release those movies today’ and in theaters.
“We didn’t buy this company to destroy that value. We’re deeply committed to releasing [Warner Bros.] movies exactly the way they release those movies today,” Sarandos said during a UBS Global Media and Communications conference on Monday.
Iger went on to tell CNBC that Disney has not yet decided if it was going to make any formal statements or make any case pro or con to regulators concerning the Netflix-Warner Bros. deal.
He also refused to say if a Netflix would present itself as a major competitor to Disney if its Warner Bros. deal goes through.
The Netflix bid for Warner Bros. Discovery if far from a foregone conclusion. This week, Paramount offered a far higher hostile takeover bid that the company took straight to Warner’s board of directors. Warner Bros. said it would seriously consider the bod and get back to Paramount within ten days.
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