The Bidding War for Warner Bros. Discovery Already Has a Winner: YouTube
Netflix has gone from Hollywood disruptor to incumbent, just as AI changes the game
No matter who wins the bidding for Warner Bros. Discovery, it’s bad news for Hollywood.
Netflix, which has at least temporarily seized pole position by signing an acquisition agreement with WBD, would be reducing the number of buyers of shows and movies by owning both. And its historical stance against releasing movies with long exclusive theatrical windows rightfully has filmmakers panicked. No amount of sweet talk from Ted Sarandos (above, right, with David Zaslav) will assuage that. Netflix is the enemy to movie theaters — even James Cameron, the most tech-embracing of movie directors, thinks so.
Then there’s Paramount’s hostile bid, backed by Jared Kushner’s PE firm, Gulf state money, and the Ellison family, which would also reduce the number of buyers for big movies and TV shows. Plus, the politics of the people involved make it a nightmare for liberal Hollywood.
But the real winner in all this isn’t part of the WBD bidding war at all. It’s 350 miles north in Silicon Valley, where YouTube continues its quiet domination of the only metric that truly matters in the streaming era: TV watch time.
The WBD bid is Netflix’s answer to the YouTube challenge — and it reveals everything about who’s in control at a company that had once reinvented the entertainment business with technology, but has now found itself in the role of studio incumbent playing defense.
Seven or so years ago, Netflix was riven by a civil war between its tech-focused side in Los Gatos and its talent-friendly Hollywood organization — and the South won. Netflix may have brought some new business practices to Hollywood, but the need to appease bankable stars to keep the premium content machine humming eventually won the day.
Now, as the industry stands on the brink of massive new disruptions driven by AI, Netflix is placing its chips not on a tech play, but on a storied institution from the past, with all its baggage. In the new media era, Netflix is taking a page from the old media playbook.
As one former Netflix executive told me in a recent story I did for Vanity Fair about the fears and hopes around AI in Hollywood, the company is “the establishment now. And like the rest of Hollywood, they’ve got the unions tied around their neck.”