The massive deal could mean higher subscription prices, fewer buyers for producers and maybe another merger down the road.
If Netflix can complete its $82.7-billion deal to acquire Warner Bros. Discovery, it will be a lot bigger but not necessarily a lot better for consumers — or for the streaming landscape the company developed.
Analysts predict that consumers, already chafing at rising subscription fees for streaming services, will be spending even more if the deal goes through.
“It’s one less competitor and it’s a detriment ultimately to consumers because they will have fewer choices, which leads to higher prices,” said Tim Hanlon, founder of the media consulting firm the Vertere Group. “I think its also a huge detriment for producers of content who want to shop their wares and will have one less place to do it.”
Emarketer senior analyst Ross Benes agreed, noting that Netflix has already aggressively raised prices, increased ad load, and stopped people from sharing passwords. “Absorbing a competitor with strong content will only lead to its service becoming more expensive and give consumers less choice,” he said.
The deal will also put pressure on Netflix competitors to counter with another move.
Comcast and Paramount were bidding for Warner Bros. Discovery because they have been unable to achieve the necessary scale for their own respective streaming platforms, Peacock and Paramount+, to be successful.
