Netflix Shopping & the Future of Film

Founded in 1923, Warner Bros. is one of Hollywood’s most influential studios. It has shaped film and television from the golden era of Hollywood to today’s global franchises and is one of the key engines of American pop culture. So it has everything that Netflix lacks – history, tradition and especially a portfolio of prestigious and beloved brands built over several decades; among the most famous, let’s mention the wizarding world of Harry Potter, the DC Comics stable or Game of Thrones. Not to mention the huge archive of movies and series, such as millennials beloved Friends.

After all, it was in this spirit that Netflix sent out an informational e-mail to hundreds of millions of its subscribers from all over the world. So that he can be sure that not only careful readers of economic columns, but really everyone will find out about the upcoming transaction.

But this deal isn’t just about the big red eNko appearing at the beginning of the future Harry Potter series. It is mainly about who will dictate the prices, rules and shape of the film market.

The first question that movie fans have automatically started to ask themselves is: will Netflix stop sending Warner films to theaters? In addition to the valuable franchises mentioned above, Netlix will also get a global distribution ecosystem, with which it does not have much experience as a streaming platform. Putting films in tens of thousands of cinemas in dozens of countries around the world at one time is not an easy matter at all. Netflix has only tried something like this with a fraction of its creations, and even then only in a limited release in a few countries.

The head of Netflix, Ted Sarandos, assures at every step that nothing will change in the distribution channels of Warners. It’s hard to say how sincere it is from a person who, in an interview with the New York Times, suggested that the blockbuster film Lawrence of Arabia can be watched on a mobile phone, which both amused and scared many.

Cinema operators are understandably horrified by the announced deal. Visitors are returning, but last year’s and this year’s sales, despite inflation, remain below the level of the last pre-Covid year of 2019. Netflix will always be primarily a streaming platform, so it can be expected that the deployment in cinemas will be seen much more as a time-limited “event”. A possible shortening of the distribution window for cinema distribution can further weaken and definitively bury the burgeoning economy of movie theaters.

This is also related to the change in audience habits after covid: attention has become fragmented and younger generations are more likely to discover films via social networks in the form of short edited videos. In practice, this means only one thing: films and series will be produced even more, knowing that they have to break through outside of classic marketing channels – in an environment where trends are created on TikTok and success is measured by algorithms.

This brings us to another fundamental question related to the acquisition – what will the Warners film under Netflix and, above all, in what quality? Warner Bros. they were a bit of shooters even within the traditional Hollywood studios, who were able to give money to seemingly unprofitable artistic projects of creators such as Paul Thomas Anderson. In an optimistic version, Warners could become the “art” division of Netflix – in exchange for stability and sufficient capital, they would fulfill Ted Sarandos’s dreams of prestigious awards.

In the pessimistic version, from Warner Bros. will become a mere purveyor of well-known brands for the stream: more series, more testing and rewriting according to algorithms, more “certainties” and fewer medium-budget films that have traditionally kept Hollywood’s auteur and festival ambitions alive. That this version seems more likely is revealed by the fact that the whole transaction is framed by the magical incantation of “synergy and savings” – that is, a push for efficiency, not for diversity of creation.

Unions warn that when two equally large contracting authorities become one giant and powerful one, the bargaining position of actors, screenwriters, directors and other professions will be drastically weakened. Such a working environment, based on short-term contracts and increasingly threatened by the advent of AI, is definitely not conducive to creative activity.

However, what hurts workers and creators in Hollywood, and by extension the US, may be an opportunity for the rest of the world. Thanks to its global reach, Netflix is forced to churn out more and more hours of content and, above all, adapt it to a local audience. That’s why it invests heavily in production all over the world – from Spain (Elita) and France (Lupin) to Poland (1670) and South Korea (the hugely successful Squid Game) to the African continent (South Africa’s Blood and Water). At the same time, he often uses the experience and contacts created here by the Warners, respectively HBO, which, however, withdrew several years ago as part of savings, including from the Czech Republic.

In order to justify the giant transaction in front of regulators and the public, Netflix can invest even more in local productions and co-productions (if only because global growth today often lies outside the Anglo-American core). Ironically, Hollywood can survive the Trump-accelerated decline of American socio-cultural hegemony, but in a multinational form.

Speaking of President Trump, it is necessary to focus on the political aspects as well. About the purchase of Warner Bros. because the Paramount studio, which is controlled through his son by Larry Ellison, one of the richest men in the world and at the same time a close friend of Donald Trump, was eminently interested. Paramount responded to the announced deal with a hostile takeover attempt, and Trump also warned that Netflix might not have it so easy with the Republican-controlled antitrust authorities.

The whole “deal of the century” can turn out in three different ways:

In general, anyway, Hollywood is entering a new phase after the debilitating streaming wars – consolidation. Studios will act even less as cultural institutions and become much more part of data platforms. This will definitely stop the fight for the viewer who has to come somewhere, the focus will be on the viewer living in captivity of an endless feed.