Netflix Says if the HBO Merger Makes It Too Expensive, You Can Always Cancel

There is concern that subscribers mightiness beryllium negatively affected if Netflix acquires Warner Bros. Discovery’s streaming and movie studios businesses. One of the biggest fears is that the merger would pb to higher prices owed to little contention for Netflix.

During a US Senate proceeding Tuesday, Netflix co-CEO Ted Sarandos suggested that the merger would person an other effect.

Sarandos was speaking astatine a proceeding held by the US Senate Judiciary Committee’s Subcommittee connected Antitrust, Competition Policy, and Consumer Rights, “Examining the Competitive Impact of the Proposed Netflix-Warner Brothers Transaction.”

Sarandos aimed to person the subcommittee that Netflix wouldn’t go a monopoly successful streaming oregon successful movie and TV accumulation if regulators allowed its acquisition to close. Netflix is the largest subscription video-on-demand supplier by subscribers (301.63 cardinal arsenic of January 2025), and Warner Bros. Discovery is the 3rd (128 cardinal streaming subscribers, including users of HBO Max and, to a smaller degree, Discovery+).

Speaking astatine the hearing, Sarandos said: “Netflix and Warner Bros. some person streaming services, but they are precise complementary. In fact, 80 percent of HBO Max subscribers besides subscribe to Netflix. We volition springiness consumers much contented for less.”

During the hearing, Democratic legislator Amy Klobuchar of Minnesota asked Sarandos however Netflix tin guarantee that streaming remains “affordable” aft a merger, particularly aft Netflix issued a terms hike successful January 2025 contempt adding much subscribers.

Sarandos said the streaming manufacture is inactive competitive. The enforcement claimed that erstwhile Netflix terms hikes person travel with “a batch much value” for subscribers.

“We are a one-click cancel, truthful if the user says, ‘That’s excessively overmuch for what I’m getting,’ they tin cancel with 1 click,” Sarandos said.

When pressed further connected pricing, the enforcement argued that the merger doesn’t airs “any attraction risk” and that Netflix is moving with the US Department of Justice connected imaginable guardrails against much terms hikes.

Sarandos claimed that the merger would “create much worth for consumers.” However, his thought of worth isn’t conscionable astir however overmuch subscribers wage to watercourse but astir contented quality. By his calculations, which helium provided without further details, Netflix subscribers walk an mean of 35 cents per hr of contented watched, compared to 90 cents for Paramount+.

The Netflix stat is akin to 1 provided by MoffettNathanson successful January 2025, uncovering that successful the anterior quarter, connected average, Netflix generated 34 cents successful subscription fees per hr of contented viewed per subscriber. At the time, the probe steadfast said Paramount+ made an mean of 76 cents per hr of contented viewed per subscriber.

Downplaying Monopoly Concerns

Netflix views Warner arsenic “both a rival and a supplier,” Sarandos said erstwhile subcommittee seat Republican legislator Mike Lee of Utah asked wherefore Netflix wants to bargain WB’s movie studios, per Variety. The streaming enforcement claimed that Netflix’s “history is astir adding much and more” contented and choice.

During the hearing, Sarandos argued that streaming is simply a competitory concern and pointed to Google, Apple, and Amazon arsenic “deep-pocketed tech companies trying to tally distant with the TV business.” He tried to downplay concerns that Netflix could go a monopoly by emphasizing YouTube’s precocious TV viewership. Nielsen’s The Gauge tracker shows which platforms Americans usage astir erstwhile utilizing their TVs (as opposed to laptops, tablets, oregon different devices). In December, it said that YouTube, not including YouTube TV, had much TV viewership (12.7 percent) than immoderate different streaming video-on-demand service, including second-place Netflix (9 percent). Sarandos claimed that Netflix would person 21 percent of the streaming marketplace if it merged with HBO Max.