Netflix’s head has said that the takeover of Warner Bros would help grow their business, and also strengthen the entertainment industry.
In an interview given to the new by Ted Sarandos co-chief executive of Netflix he said that the offer was based on expanding the business. Netflix is planning to purchase a film studio and distribution company it doesn’t currently own. He said that this move would increase the value of the market, not shrink it.
Paramount submits rival offer
The fight began in December when Warner Bros announced that it would sell some of its assets to Netflix. Paramount Global soon entered the race, with an alternative proposal.
Netflix offered 27,75 dollars for each share. This valued the deal at $82.7 billion. This bid includes Warner Bros studios and streaming networks including New Line Cinema, HBO Max. The remainder of the business would be spun off into a new independent company.
Paramount offered $30 per share for its entire business, which is worth approximately 108.4 Billion dollars. This includes the traditional pay-TV networks, which many analysts believe are in decline.
Warner Bros. has given Paramount up to Monday for Paramount to make its final and best offer, before the shareholders’ vote in a month.
Growth vs Cost Cutting
Sarandos said that Netflix’s proposal will expand the industry. Paramount will cut costs by billions if it succeeds, he said. According to him, combining two major studios into Paramount will reduce the competition in Hollywood.
He said that there are only five major studios left. This number will drop to four if Paramount acquires Warner Bros.
Netflix’s strategy is centered on growth. Sarandos emphasized the company’s investments in the UK where they have reportedly spent $6 billion on original productions and created 50,000 new jobs since 2020.
Paramount has declined to make any comment about the recent remarks. Paramount has said that its previous offer gives shareholders greater security. It has pledged that it will cover the 2.8 billion dollars breakup fees if Netflix’s deal fails.
Industry Reaction
James Cameron , a film director, has criticised the Netflix proposal. He told US regulators the deal could be harmful to cinemas.
Sarandos disagreed. According to him, the average Netflix user watches seven movies per month while an average American only visits the theaters two times a year. He said that streaming and cinema can exist together, since viewers are often looking for more content after seeing a movie on the big-screen.
The deadline is approaching and shareholders must decide soon which vision they want to see for the future of Hollywood.
