Blockbuster could have had Netflix for south of $100 million. Twice. It’s worth thinking about in consideration of Netflix’s present-day market cap of $437 billion.
Of much greater importance, it’s worth thinking about Netflix now versus the one when the 21st century began as Democrats and Republicans muster the heft of government to restrain or block Netflix’s planned purchase of Warner Brothers Discovery (WBD). Diana Moss, director of competition policy at the Progressive Policy Institute, recently told the Washington Post that “Given what is happening in entertainment markets, the DOJ is very likely to take a close look” at the Netflix purchase. The Post quoted an individual “familiar with the conversations” inside the DOJ and FTC who confirmed “this is going to get challenged.” When asked about the acquisition, President Trump indicated he too would be part of the discussions…
Which is too bad. Only for the ironies to pile on top of one another.
Imagine the antitrust squeals if in 2000 Warner Brothers and Paramount had announced a merger. Where it becomes comical in a counterfactual sense is to stop and imagine the stares media futurists would have gotten if they predicated in 2000 that in 2025, Netflix would acquire a conglomerate that includes Warner Brothers. If the prediction included Netflix outbidding a combination of Paramount and CBS, it’s a safe bet that such a visionary would have been committed.
About what you’ve read so far, notice no mention of arguably the worst merger in the history of media. Precisely because it was so ill-fated, so much so that the bigger entity in the exchange was ultimately erased from the combined company’s name for branding purposes, it’s famous enough to not rate mention or discussion.
With media, or any economic sector defined by dynamism, there’s little worth in trying to divine the future. What the in-the-know think will happen rarely does, which is why all the commentary by those in or close to government about the scrutiny awaiting the Netflix purchase is so silly. Have they no sense of history? With the internet forever do they really want to associate their good or not so good names with restraint of the latest, but surely not the last media combination?
Precisely due to the dynamism in media there’s just no need. And dynamic the sector is. As Barry Diller recently wrote in his memoirs, Who Knew (review here), the five major film studios somehow “absorbed television, cassette recorders, compact discs, all forms of distribution; whatever disruption came their way, they bought or corralled.” What this tells us is that movies, television and entertainment more broadly aren’t done pivoting no matter the ultimate winner of the WBD sweepstakes.
The Washington Post’s Megan McArdle worries a Netflix victory could end movie theater viewing as we know it, she quotes Jane Fonda saying much the same, but both (McArdle at least) could perhaps be persuaded that capital infusions generally improve the industry invested in. Applied to theaters, precisely because so many of us love them, it seems a reach to say that a Netflix win heralds their end. Think the proliferation of vinyl records after they went the way of the telephone booth, and think Amazon’s growing embrace of bricks and mortar as it expands.
Most important of all, think how little the present predicts the future in commerce as the evolution of Netflix attests. Quoting another prominent chronicler of media, “no one knows anything.” Which is why Netflix should be allowed to proceed. Its $437 billion market cap signals it has the means to find out much that we don’t know.
