OPINION:
The future of Warner Bros. Discovery is up in the air, and it’s reigniting questions about industry consolidation, the rapidly evolving media landscape and how American families consume news and entertainment. Warner Discovery Chief Executive David Zaslav announced Tuesday that the studio has “initiated a comprehensive review of strategic alternatives to identify the best path forward to unlock the full value of our assets.”
Potential suitors include Paramount and Big Tech conglomerates such as Netflix, Amazon, Apple and YouTube, companies that have tightened their hold on the media industry (and on streaming in particular).
Although the average viewer may be indifferent to the outcome, the winner of this contest matters a great deal.
As cable viewership declines and digital platforms rise, a handful of companies now decide what Americans watch, how creators are paid and which stories reach audiences. Armed with global subscriber bases, deep pockets and algorithmic recommendation systems, Big Tech has become the new gatekeeper of culture, wielding substantial power no traditional studio can match.
The impending sale of Warner could be one of the final opportunities to restore balance and competition to the changing media industry. Paramount is reportedly in pole position to acquire Warner. That deal, if completed, could finally produce a media entity with the scale, resources and content library needed to give Big Tech a run for its money. This would help restore real competition and pricing discipline, adding a major player in the entertainment industry where content creation should be paramount.
In the hands of a Big Tech giant such as Netflix, Apple or YouTube, Warner would only deepen the ongoing consolidation that stifles content creation and hamstrings consumer choice. Allowing a tech giant to acquire the company would further centralize control over content libraries and distribution, inviting higher prices, fewer choices and weaker service.
In an era when policymakers on both sides of the aisle have expressed skepticism of concentrated tech power, one would hope regulators would reject such an arrangement, but ideally, we would never face that option.
A Paramount-Warner combination, however, could reshape the landscape in a healthier way. Together, the two would control a world-class library, including “Top Gun,” “Batman,” “Mission: Impossible” and “Harry Potter.” Combined, they would own a powerful mix of theatrical distribution, streaming platforms and deep relationships with sports, news and children’s programming.
That breadth could allow a newly merged company to attract audiences and advertisers at a global scale without surrendering creative independence to Silicon Valley.
In the streaming age, size and technology are important. Netflix spends roughly $18 billion annually on content, far outpacing most legacy studios. Amazon and Apple, meanwhile, treat entertainment as a loss leader, a way to sell more Prime memberships and iPhones. Competing against that kind of cross-subsidy is nearly impossible for a traditional studio that lives or dies solely on the quality of its content.
A Warner-Paramount merger would form a viable, non-tech counterweight: a studio devoted to storytelling and consumers, not algorithms or e-commerce goals.
Mr. Zaslav has indicated that if no deal is reached, the company may split up next year, separating its cable channels from its studio and streaming divisions. That scenario would inevitably invite Big Tech to swoop in and buy the pieces, further tightening Silicon Valley’s hold over entertainment.
That outcome would be a loss for everyone. As Big Tech gains leverage, streaming prices — already rising in what has been dubbed “streamflation” — will climb even higher. Creators would have fewer outlets for their work, and Hollywood would risk becoming just another branch of the tech industry.
Healthy competition among distributors is what ensures diversity of voices, pricing pressure and innovation in user experience. When the entertainment landscape narrows to a handful of tech giants, creative risk-taking and journalistic independence suffer. Let’s not forget that America’s entertainment industry is the envy of the world, and by merging, Warner and Paramount could preserve a space for content driven by our nation’s unique artistic vision rather than machine learning metrics.
This merger is about more than who owns “Superman” or “Star Trek.” It’s about the future of Hollywood and media ownership in the U.S. It’s about whether creative industries can remain autonomous in a digital economy increasingly dictated by a few technology conglomerates. A Warner Bros.–Paramount alliance could prove to be the country’s best chance to keep the entertainment world from becoming just another subdivision of Big Tech.
• Gerard Scimeca is a lawyer and serves as chairman and co-founder of Consumer Action for a Strong Economy, a free market consumer advocacy organization.
Please read our comment policy before commenting.