There is growing concern that if Netflix acquires Warner Bros. Discovery’s (WBD’s) streaming and movie studio businesses, subscribers might face negative consequences. A primary worry is that reduced competition could lead to increased prices. However, Netflix co-CEO Ted Sarandos suggested at a Senate hearing today that the merger might have the opposite effect.
Sarandos addressed the US Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights during their session on 'Examining the Competitive Impact of the Proposed Netflix-Warner Brothers Transaction.'
His objective was to assure the subcommittee that Netflix would not become a monopoly in the streaming or film and television production sectors if the deal goes through. As of January 2025, Netflix stands as the largest subscription video-on-demand (SVOD) provider with 301.63 million subscribers, while WBD ranks third with 128 million streaming subscribers, including users of HBO Max and Discovery+.
During the hearing, Sarandos stated that Netflix and Warner Bros. offer complementary streaming services, noting, 'In fact, 80 percent of HBO Max subscribers also subscribe to Netflix. We will give consumers more content for less.'
Senator Amy Klobuchar (D-Minnesota), questioned Sarandos on how Netflix plans to maintain affordability in streaming, especially following a price increase in January 2025, despite subscriber growth.
Sarandos responded by emphasizing the competitive nature of the streaming industry. He asserted that prior Netflix price increases provided 'a lot more value' to subscribers.
'We are a one-click cancel, so if the consumer says, ‘That’s too much for what I’m getting,’ they can cancel with one click,' Sarandos explained.
When pressed further on pricing concerns, Sarandos contended that the merger does not present 'any concentration risk' and mentioned that Netflix is collaborating with the US Department of Justice on implementing safeguards against potential future price hikes.