Commentary: A plea to Netflix’s Ted Sarandos: Don’t screw up Warner Bros. and HBO

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Dear Ted Sarandos,

Congratulations on winning the bid for Warner Bros.! While this goes against your usual strategy of building companies from the ground up, it’s certainly caused a stir in the entertainment industry – and at a particularly interesting time, right before the holidays!

It’s darkly amusing to imagine David Ellison, the head of Paramount, reacting badly to the news, especially considering his privileged background.

Unfortunately, it’s not enough to calm the strong anger and worry that many people have – the fear that you want to shut down all other entertainment options and force everyone to watch only Netflix, maybe even through a device implanted in their hand, like in the movie “Logan’s Run.” (Ironically, that movie isn’t even available on Netflix, so you might not be familiar with it.)

Hollywood Inc.

A group representing movie theater owners quickly criticized Netflix’s almost $83 billion agreement to purchase Warner Bros. and HBO. Netflix has historically skipped traditional movie theaters, choosing to release films directly on its streaming service.

Many people are upset about this, including a large number of professionals working in film and television. The news even negatively impacted Netflix’s stock price.

There’s a possibility the purchase of Warner Bros., including HBO and HBO Max, might not be approved. Combining these companies would likely create a dominant position in the streaming market, and because HBO is a global service like Netflix, the deal will face careful review by regulators both in the US and internationally. This process will take time, so Netflix subscribers should probably keep their HBO Max subscriptions for now.

There are just too many streaming services – my credit card statement proves it! Experts have been predicting for years that only a handful will ultimately succeed. For example, Disney already controls Hulu, offering it alongside Disney+, and Amazon now owns MGM.

Here’s a quick take on the potential sale, from someone who loves watching TV and movies but can’t invest in entertainment companies due to professional ethics.

Hollywood Inc.

Hollywood unions and industry organizations have expressed worries about the potential merger of Netflix with Warner Bros.’ film and television studios, including HBO and HBO Max.

Leave HBO and HBO Max the hell alone

Netflix has invested heavily to show it can create TV shows as good as HBO, and they’ve succeeded. But unlike Warner Bros. Discovery’s CEO, they shouldn’t try to make Netflix seem like any other streaming service. Instead, they should continue to focus on high-quality, unique content – think of it as a luxury brand. And importantly, access to this quality shouldn’t require an additional fee. (Getting rid of the “Max” branding would be a smart move, too.)

Likewise, let Warner Bros. be Warner Bros.

Congratulations on acquiring a thriving movie studio! Before making staff cuts, consider this: assuming Netflix’s systems can manage a studio is a mistake. You’ll likely end up rehiring Warner Bros. legal and executive professionals as expensive consultants when you discover the complexities of running a studio – a costly and embarrassing situation to avoid.

Do not contribute any more to the demise of movie theaters than you already have

It’s time to think about how Netflix will be remembered. Right now, it’s a groundbreaking, successful company that has completely changed how people enjoy entertainment – and millions are paying for it. While some of those changes aren’t perfect, being known as the leader who launched the streaming era is a far better legacy than being remembered as the person who intentionally destroyed movie theaters.

Releasing movies in theaters adds to their appeal and helps with promotion. It’s perfectly fine for films to also be available on streaming services later. While new shows can attract viewers, a strong collection of existing movies and shows is what keeps people subscribed. Since it’s becoming harder to gain new subscribers, Netflix should focus on keeping its current audience happy.

Movies

Netflix is acquiring Warner Bros. for $72 billion, bringing famous franchises like Harry Potter and the DC Universe under its ownership.

Remember the Bilbao effect

Let’s remember Frank Gehry, who recently passed away, and the “Bilbao effect” he demonstrated – how a single, outstanding creation can spark widespread renewal. People generally appreciate having choices – enjoying movies both in theaters and at home. I, for instance, wish I’d seen last year’s great holiday thriller, “Carry-On,” on the big screen, but I also enjoyed watching it again on my TV. As streaming services like Netflix gain more power in Hollywood, they have a chance to create a model that supports both movie theaters and at-home viewing.

Don’t expect the consumer to pay for this

Netflix seems determined to dominate the streaming market, but it’s not there yet. Raising prices too quickly or making the service overly complicated with lots of extra fees will likely cause people to cancel their subscriptions – everyone only has so much time to watch TV. And if Netflix does this while also cutting jobs and making fewer movies, that familiar ‘Tudum’ sound could signal either a triumphant beginning or a sad ending.

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2025-12-06 04:01