Netflix Pushes Ahead With Warner Bros Discovery Deal, Reassures Staff on Theatrical Future
New Delhi: Netflix is pressing ahead with its ambitious plan to acquire key assets of Warner Bros Discovery (WBD), even as the proposed deal faces fresh complications following a rival bid from Paramount–Skydance. According to a Reuters report, Netflix co-CEOs Greg Peters and Ted Sarandos have written to employees to reaffirm the company’s commitment to the transaction and to address growing internal and industry concerns.
In the letter, seen by Reuters, the Netflix leadership sought to reassure staff that the streaming giant recognises Warner Bros’ long-standing legacy in theatrical filmmaking and intends to preserve it. The co-CEOs said Warner Bros’ tradition of releasing films in cinemas remains an “important part of their business and legacy,” signalling a notable shift in Netflix’s strategy.
Netflix recently announced a massive $72 billion equity deal to acquire Warner Bros Discovery’s film, television and streaming assets. However, the process became more complex after Paramount Skydance launched a hostile $108.4 billion enterprise bid for the entire WBD group, intensifying competition for control over one of Hollywood’s most storied studios.
Netflix Signals Shift on Theatrical Releases
In their communication to employees, Peters and Sarandos acknowledged that Netflix has historically not prioritised theatrical releases. “We haven't prioritised theatrical in the past because that wasn't our business at Netflix. When this deal closes, we will be in that business,” the letter stated.
The CEOs also said that the hostile bid from Paramount Skydance was “entirely expected,” suggesting Netflix had anticipated pushback and rival interest. Despite the growing pressure, Netflix remains confident about securing regulatory approval for its deal.
A central pillar of Netflix’s argument is the need to compete more effectively with YouTube, which continues to dominate viewing hours in the United States. Netflix told staff that even after combining with Warner Bros Discovery, its share of US viewing hours would increase only marginally — from 8 per cent to 9 per cent — still trailing YouTube’s 13 per cent.
Antitrust Debate Intensifies
Netflix has argued that the merger is necessary to remain competitive in a market increasingly shaped by tech platforms rather than traditional studios. At the UBS 2025 Global Media and Communications Conference, Greg Peters reiterated this position, saying the combined entity would still lag behind YouTube in overall viewership.
He also warned that a Paramount–WBD merger would pose a bigger competitive concern. According to Peters, such a combination could push viewership to nearly 14 per cent, surpassing both Netflix and YouTube.
Paramount Skydance CEO David Ellison strongly rejected Netflix’s logic. He likened the argument to claiming “Coke can buy Pepsi” simply because both are beverages, arguing that combining major studios would hand Netflix excessive market power. Ellison also claimed the Netflix-WBD deal could spell “the death of the theatrical movie business in Hollywood,” positioning Paramount’s bid as an effort to preserve cinema culture.
Antitrust experts remain unconvinced by Netflix’s YouTube comparison. Attorney Abiel Garcia noted that regulators are unlikely to see Netflix and YouTube as direct competitors, given their fundamentally different content models and markets.
What Lies Ahead
Netflix has insisted that the merger would not lead to studio shutdowns or large-scale layoffs, despite growing fears around artificial intelligence and automation in content creation. The company has also stressed that Warner Bros’ studio operations would continue, maintaining a balance between streaming growth and theatrical tradition.
As regulatory scrutiny intensifies and rival bids loom, the Netflix–Warner Bros Discovery deal is shaping up to be one of the most consequential media battles in recent history, with implications for Hollywood, streaming economics and the future of theatrical cinema.
Our Thoughts
Netflix’s pursuit of Warner Bros Discovery marks a defining moment for the global entertainment industry. While the streamer’s assurance on theatrical releases may ease fears in Hollywood, the deal raises larger questions about market concentration and creative diversity. Whether Netflix can balance its data-driven streaming model with the legacy of theatrical cinema will determine not just the fate of this merger, but the future shape of the film business itself.