Cinema United spoke out about Warner Bros. Discovery being sold to any streaming platform on Wednesday after the legacy studio’s board rejected Paramount’s latest amended offer, warning that a similar purchase by Netflix would have “irreversible negative impact” on the movie theater business.
“We are deeply concerned that this acquisition of Warner Bros. by Netflix will have a direct and irreversible negative impact on movie theatres around the world,” the theater owners said. “Such an acquisition will further consolidate control over production and distribution of motion pictures in the hands of a single, dominant, global streaming platform in a market that is already highly concentrated. The impact will not only be felt by theatre owners, but by movie fans and surrounding businesses in communities of all sizes.”
“If Paramount or another major studio ends up displacing Netflix as the buyer, our concerns are no less serious,” they continued. “A combination of Paramount and Warner Bros., for instance, would consolidate as much as 40% of each year’s domestic box office in the hands of a single dominant studio.”
The statement was submitted to the House Judiciary Subcommittee on the Administrative State, Regulatory Reform and Antitrust ahead of its Wednesday hearing. Cinema United has previously condemned the potential sale as well.
The world’s largest exhibition trade association further voiced its concerns over four main issues: “Fewer movies being produced for theatrical exhibition, increased marketplace leverage for studios vis-à-vis theatre owners, reduced diversity of films for movie fans and job losses across the entertainment industry and in communities worldwide.”
“The key to a successful industry overall is having a diverse, robust, and consistent product pipeline that responds to consumer demand. The number of films being produced for theatrical exhibition is slowly returning to pre-2019 levels. However, that growth is threatened by further consolidation. At best, an acquisition of Warner Bros. will stall the growth we have seen in the last four years. More realistically, however, it will result in a significant reduction of theatrical releases,” Cinema United concluded. “We must heed the lessons of the past: further industry consolidation has consistently led to fewer movies being made, and there is no reason whatsoever to believe the outcome here would be any different, particularly given Netflix’s stated views of movie theatres over the past decade-plus.”
The statement came after the WBD board rejected Paramount’s revised $108.4 billion bid in favor of its $83 billion deal with Netflix due to “significant costs, risks and uncertainties.” For its part, Netflix has insisted on multiple occasions that the sale would not result in the end of the theatrical release model — just evolving windows.
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