Hollywood at Risk? Netflix Acquisition of Warner Bros. Raises Monopsony Concerns
A potential Netflix acquisition of Warner Bros. has sparked major concerns across Hollywood, with some experts warning it could fundamentally reshape the industry. Roy Price, former head of Amazon Studios and now CEO of International Art Machine, warned in a New York Times op-ed that such a merger could create a monopsony, where a single buyer controls much of the market and dominates creative decisions.
What Roy Price Is Saying
Price explained that the fear of industry centralization isn’t new—Hollywood has faced disruption from TV, home video, streaming, and AI—but this deal could bring a new level of concentration.
He wrote: “If Netflix acquires Warner Bros., this long-prophesied death may finally arrive… every deal, every creative decision, every creative career will increasingly revolve around the gravitational mass of one entity.”
In other words, all content creation—movies, shows, and even jobs—could revolve around one dominant company, giving it unprecedented control over both talent and storytelling.
Monopsony Concerns
Price’s warning isn’t about Hollywood disappearing. Instead, he highlighted the risk of centralization: fewer buyers in the market could lead to less content, lower pay, and fewer opportunities for creatives like writers, directors, actors, showrunners, and visual effects artists.
He drew parallels with the failed Penguin Random House–Simon & Schuster merger, which would have given one publisher too much leverage over authors.
“A Netflix merger with Warner Bros. would create a monopsony problem: too few buyers with too much bargaining power,” Price wrote.
Netflix’s Defense
Netflix, however, argues that the acquisition would strengthen the industry. According to the company, combining forces with Warner Bros. would:
- Expand U.S. production capacity
- Boost investment in original content
- Create more jobs for the creative community
- Offer talent opportunities to work with highly prized intellectual property
The streaming giant has also emphasized that Warner Bros. operations will continue independently, and films will still hit theaters. HBO will be included in the deal, while Warner’s other TV channels will be spun off into a separate company.
Hollywood Giants and Competition
Despite concerns, other major players remain active in Hollywood:
- Comcast (NBCUniversal) – $37 billion in 2024 content spending
- Alphabet (YouTube) – $32 billion
- Disney – $28 billion
- Amazon – $20 billion
- Netflix – $17 billion
- Paramount – $15 billion
Comcast and Paramount also reportedly bid for Warner Bros., reflecting the high stakes.
Even so, theater owners, producers, and creative professionals have voiced opposition to Netflix’s takeover. Famed director Bong Joon Ho noted that the cinematic experience likely won’t vanish entirely, but the deal could reshape how content is made and distributed.
Legal and Political Scrutiny
The merger is expected to face heavy antitrust review in the U.S., especially under the Trump administration, which has expressed skepticism about the deal. A notable $5.8 billion breakup fee makes this one of the largest ever in entertainment history.
Beyond business concerns, some public figures, including Jane Fonda, have raised broader issues. She warned of a “constitutional crisis”, urging regulators not to allow a merger that could influence content decisions or limit free speech.
The AI Angle
The Netflix-Warner Bros. deal isn’t just about movies and shows. Analysts see a tech dimension, particularly the role of content in training AI models for the future of entertainment.
Divyaunsh Divatia, research analyst at Janus Henderson Investors, explained that Netflix is “levering up on premium entertainment” as competition from short-form video grows. Owning Warner Bros.’ content library could give Netflix a strategic advantage in AI-driven video creation, potentially shaping the industry for years to come.
Why the Industry Is Watching Closely
This merger could fundamentally reshape Hollywood’s ecosystem:
- Fewer competing buyers could limit creative freedom
- Centralized decision-making could prioritize corporate strategy over artistic innovation
- AI and tech integration could amplify the influence of a single company
While Netflix emphasizes potential benefits like increased production and more job opportunities, critics worry that the balance of power would tilt too heavily toward one entity, echoing broader concerns about monopolistic behavior in tech and entertainment.
What’s Next
Regulators, industry leaders, and creative professionals will be closely watching the deal as it unfolds. The outcome could determine:
- How much control one company can have over Hollywood
- The future of content creation, from movies to AI-driven projects
- Compensation and opportunities for creatives across the industry
In short, Netflix’s potential acquisition of Warner Bros. isn’t just a business deal—it’s a possible turning point in how entertainment is made, distributed, and consumed globally.