Netflix is eating Hollywood — because it has to
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What is the main topic discussed in this episode?
Hello and welcome to Decoder. I'm Nilay Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems. Today I'm talking about the bidding war for Warner Bros. Discovery, which is the biggest story in the entertainment industry right now, and for good reason. It has pretty much everything you could want in a buzzy Hollywood saga. Big names, big money, big drama. Right now, the winning bidder is Netflix. The streaming juggernaut has so far won the bidding process for Warner Bros., offering $83 billion for the movie studios, but not the cable channels.
What is the current status of the Warner Bros. bidding war?
But Paramount Skydance simply won't go away, even though the official process is over. The company has bid, bid again, and is now attempting a hostile takeover to the tune of $108 billion for everything that Warner has, including those cable channels. Paramount is run by David Ellison, the son of Oracle co-founder and tech billionaire Larry Ellison, and I have to say, his whole vibe feels ripped straight from an episode of Succession. This man is desperate to become a bona fide media mogul, using a combination of Paramount, his dad's ever-growing AI money, and the good graces of the Trump administration to make it happen. Caught up in the middle of all this are HBO, CNN, and Warner Brothers Pictures.
Despite world-class brand recognition, legitimate mega-hits, and incredible franchises, these companies have been so historically comically mismanaged under a long series of clueless corporate parents that the whole bundle has ended up sold, merged, or spun off into something new more times than anyone can really count over the past two decades. Seriously, it is mind-boggling how badly these companies have been run over the past 25 years. To help me make sense of all this, I wanted to talk with Julia Alexander, a Verge alum and now media correspondent at Puck News, who's one of the best in the business at analyzing corporate strategy, Hollywood, and what's next in entertainment. Julia really helped me break down why Netflix wants Warner Brothers.
And my David Ellison seems to think he's got a better, or even different, strategy than current Warner Bros. boss David Zasloff.
Why is Netflix the leading bidder for Warner Bros.?
Perhaps most importantly, we also discussed how the tech industry fits into the puzzle. Because as you'll hear Julia explain, the central pressure facing Hollywood today is the battle for our attention. And that battle is being fought by everything. Video games like Fortnite and Roblox, and of course, short-form video on YouTube, TikTok, and Instagram. Soon all of these platforms could be flooded with cheap, endless AI video, and it seems that only a few companies, Netflix chief among them, seem to have any plan whatsoever for when that wrecking ball finally hits. If you're a decoder listener, you know that I love having Julia on, and you know I love talking to her about Hollywood and the entertainment industry.
This episode's no different. Okay, Puck Media correspondent Julia Alexander on the deal for Warner Bros. Discovery. Here we go.
Julia Alexander, you're the media correspondent in Puck. Welcome back to Decoder. Thank you so much for having me. How are you? I'm good.
What strategies is Paramount Skydance using in the bidding process?
I wanted you on because it feels like every day there is new, confusing information about who's going to buy Warner Brothers. It all kind of adds up to the same thing, which is Netflix is going to end up buying it. Paramount is going to make it really noisy until the inevitable. I love talking to you about the streaming business, about what's going on in media. I want to start with a very basic question. This is what I really want to understand. As far as I can tell, every company that has ever bought Warner Brothers has killed itself. Why does Netflix want to buy Warner Brothers so badly?
It's a good question. And I'm sure we'll get into our favorite conversation going back to Randall Stevenson and AT&T back in 2016, 10 years ago. But why Netflix wants to buy it is not because Ted Sarandos or Greg Peters, who are co-CEOs, truly wanted to have to do this.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:02–0:30
2
What is the current status of the Warner Bros. bidding war?
0:30–1:50
3
Why is Netflix the leading bidder for Warner Bros.?
1:50–2:50
4
What strategies is Paramount Skydance using in the bidding process?
2:50–4:47
5
How has the management of Warner Bros. impacted its value?
4:47–8:11
6
Why does Netflix need to acquire Warner Bros. now?
8:11–8:46
7
What role does the tech industry play in the entertainment bidding wars?
8:46–10:08
8
How does the competition with platforms like TikTok affect Netflix's strategy?
10:08–56:37