There is concern that subscribers might be negatively affected if Netflix acquires Warner Bros. Discovery’s streaming and movie studios businesses. One of the biggest fears is that the merger would lead to higher prices due to less competition for Netflix.
During a US Senate hearing Tuesday, Netflix co-CEO Ted Sarandos suggested that the merger would have an opposite effect.
Sarandos was speaking at a hearing held by the US 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 wouldn’t become a monopoly in streaming or in movie and TV production if regulators allowed its acquisition to close. Netflix is the largest subscription video-on-demand provider by subscribers (301.63 million as of January 2025), and Warner Bros. Discovery is the third (128 million streaming subscribers, including users of HBO Max and, to a smaller degree, Discovery+).
Speaking at the hearing, Sarandos said: “Netflix and Warner Bros. both have streaming services, but they are very complementary. In fact, 80 percent of HBO Max subscribers also subscribe to Netflix. We will give consumers more content for less.”
During the hearing, Democratic senator Amy Klobuchar of Minnesota asked Sarandos how Netflix can ensure that streaming remains “affordable” after a merger, especially after Netflix issued a price hike in January 2025 despite adding more subscribers.
Sarandos said the streaming industry is still competitive. The executive claimed that previous Netflix price hikes have come with “a lot more value” for subscribers.
“We are a one-click cancel, so if the consumer says, ‘That’s too much for what I’m getting,’ they can cancel with one click,” Sarandos said.
When pressed further on pricing, the executive argued that the merger doesn’t pose “any concentration risk” and that Netflix is working with the US Department of Justice on potential guardrails against more price hikes.
Sarandos claimed that the merger would “create more value for consumers.” However, his idea of value isn’t just about how much subscribers pay to stream but about content quality. By his calculations, which he provided without further details, Netflix subscribers spend an average of 35 cents per hour of content watched, compared to 90 cents for Paramount+.
The Netflix stat is similar to one provided by MoffettNathanson in January 2025, finding that in the prior quarter, on average, Netflix generated 34 cents in subscription fees per hour of content viewed per subscriber. At the time, the research firm said Paramount+ made an average of 76 cents per hour of content viewed per subscriber.
Downplaying Monopoly Concerns
Netflix views Warner as “both a competitor and a supplier,” Sarandos said when subcommittee chair Republican senator Mike Lee of Utah asked why Netflix wants to buy WB’s film studios, per Variety. The streaming executive claimed that Netflix’s “history is about adding more and more” content and choice.
During the hearing, Sarandos argued that streaming is a competitive business 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 TV viewership. Nielsen’s The Gauge tracker shows which platforms Americans use most when using their TVs (as opposed to laptops, tablets, or other devices). In December, it said that YouTube, not including YouTube TV, had more TV viewership (12.7 percent) than any other streaming video-on-demand service, including second-place Netflix (9 percent). Sarandos claimed that Netflix would have 21 percent of the streaming market if it merged with HBO Max.
We’re in the midst of what’s expected to be a long series of arguments as Netflix and Paramount Skydance attempt to own Warner Bros. Discovery’s assets. In the most recent developments, Netflix amended its $72 billion offer to be all-cash. Netflix is looking to buy HBO Max and WB’s film studios for $27.75 per share, or an enterprise value of $82.7 billion. Paramount is seeking a hostile takeover and has sued Warner over its Netflix deal. It has 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.
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