Warner Bros. Discovery's sale announcement turned the entertainment industry upside down. Though Paramount came out as a strong contender, other companies surfaced to show their interest in acquiring the studio. An unexpected player in the WBD sale appeared in the form of Netflix. Following the studio confirming it was up for sale, it didn't take long for the streaming giant to position itself as a potential buyer.
Given its possible drawbacks, such as a diminished content output and less creative outlets, the sentiment around the industry regarding WBD's sale has not been positive overall. Out of all of the potential buyers, however, Netflix appears to be perceived as the worst possible outcome. The Wrap published a report on Netflix's theatrical ambitions, offering interesting insight into what the company acquiring Warner Bros. would entail.
YouTube is said to be putting pressure on Netflix as it continues to lead viewers' attention away from the streamer, seemingly hinting at this competition motivating Netflix to seek a seat at the Warner Bros. Discovery-sale table. However, the sentiment for some is that Netflix isn't ready to own a company like WBD. Founder of the Owl & Co consulting firm, Hernan Lopez, questioned if Netflix is in a position to own a mainly theatrical movie studio:
"The internal debate at Netflix about whether to buy WB may have prompted a second debate: 'Is Netflix ready to own a movie studio?'"
This is due to the studio's reluctance to embrace the theatrical model for its original films. As explained by The Wrap, though the studio has been able to attract some top talent, it's, at times, unable to retain it. It's also lost out on promising projects, such as the Margot Robbie-starring Wuthering Heights, directed by Promising Young Woman's Emerald Fennell.
The breaking point for such rejections? Netflix's reported insistence on keeping its projects streaming-exclusive—or, at least, with as short of a theatrical window as possible. Having said that, the streamer is said to be softening up on that stance. Lopez further stated that, should the streamer end up as WBD's new owner, it would be forced to enter the theatrical busines:
"If Netflix ends up winning Warner Bros., there's no question they will have to be in the theatrical business. But if they end up deciding not to bid, or end up outbid, I can see them softening their stance on theatrical distribution much like they did with advertising, or with sports. After all, movies only account for about a quarter of their viewing hours."
An executive of a regional theater told The Wrap that, for them, Netflix acquiring Warner Bros. would not be good news: "Netflix would be the worst-case scenario for me." The executive explained this was because, under Netflix, big theatrical properties like DC and horror franchises like The Conjuring could become streaming-first IP.
Such a move would not only offset the industry in terms of budget allocation (seeing there wouldn't be an income stream from ticket or home media sales), it would also deal a major blow to the film distribution industry, which is already in a fragile state given the constant underperformance of would-be blockbusters.
Still, with all of the apparent worry around the industry about Netflix ending up the new owner of WBD, the streamer's interest in the legendary studio may not be as serious as it seems. Variety previously reported that, "some industry sources believe the streamer is mostly trying to drive up the price Paramount Skydance will need to pay." If accurate, that piece of information points to Netflix being out of the conversation for what entity Warner Bros. Discovery will ultimately merge with.