There is a concern that subscribers could be negatively affected if Netflix acquires Warner Bros. streaming and movie studio operations Discovery. One of the biggest fears is that the merger will lead to higher prices due to less competition for Netflix.
At a U.S. Senate hearing Tuesday, Netflix co-CEO Ted Sarandos suggested the merger would have the opposite effect.
Sarandos was speaking at a hearing held by the U.S. Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights: “Examining the Competitive Impact of the Proposed Netflix-Warner Brothers Transaction.”
Sarandos aimed to convince the subcommittee that Netflix would not become a monopoly in streaming or film and television production if regulators allowed it. its acquisition close. Netflix is the largest subscription video-on-demand provider in terms of subscribers (301.63 million as of January 2025), and Warner Bros. Discovery is third (128 million streaming subscribers, including users of HBO Max and, to a lesser extent, Discovery+).
Speaking at the hearing, Sarandos said, “Netflix and Warner Bros. both have streaming services, but they are very complementary. In fact, 80% of HBO Max subscribers also subscribe to Netflix. We will offer consumers more content for less.”
During the hearing, Democratic Sen. Amy Klobuchar of Minnesota asked Sarandos how Netflix could ensure streaming remains “affordable” after a merger, particularly after Netflix released a price increase in January 2025 despite adding more subscribers.
Sarandos said the streaming industry is still competitive. The executive said Netflix’s previous price increases had brought “much more value” to subscribers.
“We do one-click cancellation, so if the consumer says, ‘That’s too much for what I’m getting,’ they can cancel with one click,” Sarandos said.
Asked further about pricing, the executive argued that the merger posed “no concentration risk” and that Netflix was working with the U.S. Department of Justice on possible safeguards against further price increases.
Sarandos said the merger would “create more value for consumers.” However, his idea of value is not just about how much subscribers pay to stream, but also how much content quality. According to his calculations, which he provided without further details, Netflix subscribers spend on average 35 cents per hour of content watched, compared to 90 cents for Paramount+.
The Netflix statistic is similar to that provided by MoffettNathanson in January 2025, finding that in the previous quarter, Netflix generated an average of 34 cents in subscription fees per hour of content viewed per subscriber. At the time, the research firm reported that Paramount+ earned an average of 76 cents per hour of content viewed per subscriber.
Minimizing Monopoly Concerns
Netflix views Warner as “both a competitor and a supplier,” Sarandos said when Utah Republican Sen. Mike Lee, chairman of the subcommittee, asked why Netflix wanted to buy WB’s film studios, according to Variety. The streaming executive claimed that Netflix’s “story is about adding more and more” content and choices.
During the hearing, Sarandos argued that streaming is a competitive industry and pointed to Google, Apple and Amazon as “deep-pocketed tech companies trying to run away with the TV business.” He tried to downplay concerns that Netflix could become a monopoly by emphasizing YouTube’s high viewership. by Nielsen The gauge The tracker shows which platforms Americans use most when using their TV (as opposed to laptops, tablets, or other devices). In December, he said YouTube, not counting YouTube TV, had more TV viewership (12.7%) than any other video-on-demand streaming service, including second-place Netflix (9%). Sarandos claimed that Netflix would have 21% of the streaming market if it merged with HBO Max.
We are in the middle of what is expected to be a long series of disputes as Netflix and Paramount Skydance attempt to own Warner Bros. assets. Discovery. In the most recent developments, Netflix modified its $72 billion offer for be entirely in cash. Netflix is looking to buy movie studios HBO Max and WB for $27.75 per share, or an enterprise value of $82.7 billion. Paramount is seeking a hostile takeover bid and has Warner continued. about its deal with Netflix. He offered $108.4 billion at $30 per share for all of Warner Bros. Discovery, including its cable channels.
This story was originally published by Ars Technica.