Netflix to buy Warner/Discovery

[Marcel Birgelen]

So Paramount just added another $20 billion to their bid. Did I say 60/40 above? Make it 70/30.

I guess everybody who has worked in the IT sector has come across the REAL Oracle at least once and most do not remember that as a fun experience. Oracle is known as a deeply manipulative, evil corporation and Larry Ellison is apparently on a spree to buy a media empire for his son, all with the potentially corrupt blessings of the U.S. government.

On the other hand, Paramount promises at least 30 releases to theaters a year, if they acquire WB, whereas Netflix only states that they will release *some* movies to theaters, but won't commit to any hard numbers.

So, at least on paper, this seems to be the better of the two deals for theatrical industry across the board...

Whoever wins this bidding war, I'm pretty shocked and amused at the same time regarding the amount of money that's been thrown at this. The new company, wether that's Netflix/WB or Paramount/WB will be settled with such a horrendous amount of debt, it will be interesting to see how they're going to keep the lights on. Most of those mega-mergers in semi-recent history I can remember, ended in failure...

Time Warner & AOL
Time Warner & AT&T
Daimler & Chrysler
HP & Compaq
HP & Autonomy
Sprint & Nextel
Heinz & Kraft and later Unilever

And the list goes on and on...

I'm also not sure if the acquisition of Fox by Disney can be called a financial success and I'm waiting for the moment when we can add the "Warner" name to the list for a third time...

[Steve Guttag]

Netflix also promises a "more customer friendly" theatrical release. I interpret that as to crush the release window even more (and the probably prove that there is no point in theatres).

[Mark Gulbrandsen]

Yep, I totally agree with that assessment!! But there will still be theaters, and likely few plex's.

[Frank Cox]

I wonder if there will.

There has to be some minimum number of screens to justify the expense of making and maintaining projection equipment. And there isn't a large market for that stuff now.....

[Marcel Birgelen]

I wonder if there will.

There has to be some minimum number of screens to justify the expense of making and maintaining projection equipment. And there isn't a large market for that stuff now.....

The projection market in total hasn't really shrunk over the last years, it's not that there aren't any good projectors outside the DCI certified circuit (actually, you could argue that some of the best might actually be OUTSIDE of the DCI-certified circuit), it's just that you cannot use any non-DCI projector to play any first-run movie, because nobody will give you a KDM for that.

Also, the quality of LED walls is constantly improving, while the costs are coming down rapidly too.

So the concept of building a big room with more or less cosy seats and a big wall capable of showing moving pictures and a sound system capable of reproducing more or less good sound isn't going away anytime soon... I'm not sure if the entire concept behind DCI will survive another decade though...

[Mark Gulbrandsen]

Good article and talk on the dangers of this deal...

[Leo Enticknap]

Iger has now waded in. Irony of ironies:

He also worried that delivering a theatrical film producer into the hands of a streaming concern might hurt theaters that are already operating with “relatively thin margins.”

This from the boss of the company that led the charge into the streaming business model that tries to cut out the theaters...

[Mark Gulbrandsen]

James Cameron pretty much feels the same way most people do about this merger...

[Harold Hallikainen]

Speaking of business models: in 1969, Warner Bros. was purchased by Kinney, a company whose business model was running funeral homes, parking garages and janitorial services. The entertainment media at the time was aghast that a classic studio like WB was going to be owned by people who made their money embalming corpses, but they wound up doing a credible job of it, so much so that the other businesses were spun off and they became pure-play media before getting merged into Time Warner in '89. There are Kinney era WB titles that are classics of cinema. What I am saying is: wait and see what happens. Netflix at the end of the day is a movie company. They aren't going to abandon theatrical, at least not for

Interesting! And then in 2001, Warner Brothers HBO did the series "Six Feet Under." I had never heard of Kinney. They have quite a history!

[Tony Bandiera Jr]

Interesting! And then in 2001, Warner Brothers HBO did the series "Six Feet Under." I had never heard of Kinney. They have quite a history!

And from the wiki they had also acquired Panavision in 1968.....the more you know....

[Marcel Birgelen]

Back in 2004, a company I did contract work for, rented a (very) small apartment on Wall Street in NYC for their contract workers to stay. Apparently that was cheaper than reimbursing hotel bills for them. I remember we had "Road Runner" Internet in there, by Time Warner Cable (TWC). That business apparently eventually ended up being part of Charter/Spectrum, narrowly avoiding being gobbled up by Comcast.

Comcast eventually ended up in the hands of NBC Universal...
Meanwhile, I vividly remember the "Gulf+Western" brand on the Paramount title card. That company truly did everything...

[Harold Hallikainen]

Meanwhile, I vividly remember the "Gulf+Western" brand on the Paramount title card. That company truly did everything...

I also remember seeing Gulf and Western on the Paramount title card. Looking at the Wikipedia link you provided, it looks like Gulf and Western beat Amazon with "one click shopping" and "free returns." They were buying and disposing of companies faster than my wife buys from Amazon and then returns stuff (I call it "catch and release shopping.").

While reading through the Gulf and Western page, I found a movie was a paradoy of Gulf and Western buying Paramount. In Silent Movie, a group wants to produce a silent movie with big stars and convinces the head of Big Pictures Studios that the success of this movie could prevent Big Picture Studios from being acquired by the New York conglomerate Engulf & Devour.

[Marcel Birgelen]

Meanwhile, WB says they consider the Paramount bid to be hostile, they're worried about how this deal will be financed and they've advised their shareholders to reject the bid. It looks like WB really wants to sell itself to Netflix rather than to Paramount...

[Jim Cassedy]

While I personally don't think that the proposed Netflix-Warner Bros merger is a great idea,
it's interesting to take a look back at early Hollywood History. Just about every major studio
(Warner Bros, MGM, Fox, Universal, RKO, Paramount ) were the result of mergers between
two studios, or a studio and a distribution company, extant at that time. Even a couple of the
well known "Poverty Row" producers came about through the joining of several low budget
production facilities, each on the brink of bankruptcy, combining into one entity to save their
souls, so to speak. If one looks back through old issues of MOVING PICTURE WORLD, or
EXHIBITOR's HERALD magazines, the wisdom of a couple of these mergers were looked
at unkindly by the press & public back when they were proposed. So, ultimately, I think only
time (as in 'decades') will tell if this current WB/Netflix insanity works out well for the industry.

"EXHIBIT A" - A magazine cover not long after Metro merged with Goldwyn Studios.
And, in keeping with the current topic- - This cover was the first edition published
after "Exhibitor's Herald" and "Moving Picture World" merged into one magazine.
In the early 30's it was acquired by another owner, who merged it with yet another
publication to become "Motion Picture Herald" !
MPW_Merge_Jan1928.jpg

[Ryan Gallagher]

I caught a headline that Netflix just upped it's offer to "all cash" 72 million. We'll see what Paramount does I guess?