Netflix’s Warner Bros. deal could threaten theatrical releases

Netflix announced Friday it will acquire Warner Bros. Discovery’s studios and streaming division for $72 billion, sparking industry alarm over the future of theatrical film releases as co-CEO Ted Sarandos said release windows would “evolve” to reach audiences “quicker.”reuters

Cinema United, representing global theater chains, called the deal an “unprecedented threat” that could eliminate 25% of annual domestic box office revenue if Warner Bros. films receive Netflix’s typical limited theatrical treatment of 17-day runs instead of traditional 45-day windows.cinemaunited

The $82.7 billion transaction, which combines Netflix’s 300 million subscribers with HBO Max’s nearly 130 million, faces intense antitrust scrutiny from regulators and opposition from the Directors Guild of America and anonymous filmmakers who warned Netflix would hold “a noose around the theatrical marketplace.”reuters

Warner Bros Theatrical Releases Uncertain Under Netflix Ownership

Netflix’s announcement Friday that it will acquire Warner Bros. for $72 billion has sent shockwaves through Hollywood, with industry leaders warning the deal threatens the future of theatrical film releases.reuters

The streaming giant said it “expects” to maintain Warner Bros.’ theatrical operations in a statement announcing the acquisition, but the carefully hedged language has sparked alarm across the film industry. Netflix co-CEO Ted Sarandos indicated Friday that release windows would “evolve to be much more consumer friendly” to “meet the audience where they are, quicker,” suggesting Warner Bros. films could see significantly shorter theatrical runs than the studio’s current 45-day window.variety

Industry Backlash Intensifies

Cinema United, representing global theater chains, issued a statement Friday calling the proposed acquisition “an unprecedented threat to the global exhibition business”. The organization warned the deal could eliminate 25 percent of the annual domestic box office if Warner Bros. films receive the same limited theatrical treatment as Netflix’s current releases.cinemaunited

“Netflix’s stated business model does not support theatrical exhibition. In fact, it is the opposite,” said Cinema United President and CEO Michael O’Leary. The trade group noted that Netflix currently grants only a handful of films minimal theatrical releases before streaming, typically limiting runs to 17 days.npr

The Directors Guild of America announced Thursday it will meet with Netflix over “significant concerns” about the acquisition. “We believe that a vibrant, competitive industry—one that fosters creativity and encourages genuine competition for talent—is essential to safeguarding the careers and creative rights of directors and their teams,” the guild said in a statement.variety

On Thursday, an anonymous group of prominent filmmakers sent a letter to Congress urging lawmakers to oppose the deal. The producers, who remained unnamed citing fear of retaliation given Netflix’s market power, warned the streamer would “effectively hold a noose around the theatrical marketplace” by reducing theatrical windows and diminishing licensing fees.variety

Regulatory Scrutiny Expected

The $82.7 billion transaction, which includes Warner Bros.’ debt, faces intense antitrust scrutiny. The deal would combine Netflix’s 300 million subscribers with HBO Max’s nearly 130 million, creating a dominant streaming entity.reuters

Republican lawmakers, including Senator Roger Marshall and Representative Darrell Issa, have already urged regulators to examine the deal closely, warning it could lead to fewer films and reduced theatrical output. The transaction is expected to close in 12 to 18 months pending regulatory approval.fortune