{"id":41264,"date":"2025-12-13T07:15:00","date_gmt":"2025-12-13T15:15:00","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=41264"},"modified":"2025-12-22T09:41:09","modified_gmt":"2025-12-22T17:41:09","slug":"whether-netflix-or-paramount-buys-warner-bros-entertainment-oligopolies-are-back-bigger-and-more-anticompetitive-than-ever","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/whether-netflix-or-paramount-buys-warner-bros-entertainment-oligopolies-are-back-bigger-and-more-anticompetitive-than-ever\/","title":{"rendered":"Whether Netflix or Paramount buys Warner Bros., entertainment oligopolies are back \u2013 bigger and more anticompetitive than ever"},"content":{"rendered":"\n

Matthew Jordan<\/a>, Penn State<\/a><\/em><\/p>\n\n\n\n

News of Netflix\u2019s bid to buy Warner Bros. last week sent shock waves through the media ecosystem.<\/p>\n\n\n\n

The pending US$83 billion deal is being described as an upending of the existing entertainment order, a sign that it\u2019s now dominated by the tech platforms<\/a> rather than the traditional Hollywood power brokers.<\/p>\n\n\n\n

As David Zaslav<\/a>, CEO of Warner Bros. Discovery, put it, \u201cThe deal with Netflix acknowledges a generational shift: The rules of Hollywood are no longer the same.\u201d<\/p>\n\n\n\n

Maybe so. But what are those rules? And are they being rewritten, or will moviegoers and TV audiences simply find themselves back in the early 20th century, when a few powerful players directed the fate of the entertainment industry?<\/p>\n\n\n\n

The rise of the Hollywood oligopolies<\/h2>\n\n\n\n

As Hollywood rose to prominence in the 1920s, theater chain owner Adolf Zuker spearheaded a new business model<\/a>.<\/p>\n\n\n\n

\"Cartoon
Lew Merrell\u2019s 1920 cartoon for Exhibitors Herald, a film industry trade publication, depicts Adolf Zukor performing the feat of vertical integration. Wikimedia Commons<\/a><\/figcaption><\/figure>\n\n\n\n

He used Wall Street financing to acquire and merge his film distribution company, Famous Players-Lasky, the film production company Paramount and the Balaban and Katz chain of theaters under the Paramount name. Together, they created a vertically integrated studio that would emulate the assembly line production of the auto industry: Films would be produced, distributed and shown under the same corporate umbrella.<\/p>\n\n\n\n

Meanwhile, Harry, Albert, Sam and Jack Warner \u2013 the Warner brothers<\/a> \u2013 had been pioneer theater owners during the nickelodeon era<\/a>, the period from roughly 1890 to 1915, when movie exhibition shifted from traveling shows to permanent, storefront theaters called nickelodeons.<\/p>\n\n\n\n

They used the financial backing of investment bank Goldman Sachs to follow Zucker\u2019s Hollywood model. They merged their theaters with several independent production companies: the Vitagraph film distribution company<\/a>, the Skouras Brothers theater chain<\/a> and, eventually, First National<\/a>.<\/p>\n\n\n\n

But the biggest of the Hollywood conglomerates was Metro-Goldwyn-Mayer<\/a>, created when the Loews theater chain merged Metro Pictures, Goldwyn Pictures and Mayer Pictures.<\/p>\n\n\n\n

At its high point, MGM had the biggest stars of the day under noncompete contracts<\/a> and accounted for roughly three-quarters of the entire industry\u2019s gross revenues<\/a>.<\/p>\n\n\n\n

By the mid-1930s, a handful of vertically integrated studios dominated Hollywood \u2013 MGM, Paramount, Warner Brothers, RKO and 20th Century Fox \u2013 functioning like a state-sanctioned oligopoly. They controlled who worked, what films were made and what made it into the theaters they owned. And though the studios\u2019 holdings came and went, the rules of the industry remained stable until after World War II.<\/p>\n\n\n\n

Old Hollywood loses its cartel power<\/h2>\n\n\n\n

In 1938, the Department of Justice and the Federal Trade Commission sued the \u201cBig Five\u201d studios<\/a>, arguing that their vertically integrated model was anti-competitive.<\/p>\n\n\n\n

After the Supreme Court decided in favor of the U.S. government in 1948 \u2013 in what became known as the Paramount Decision<\/a> \u2013 the studios were forced to sell off their theater chains<\/a>, which checked their ability to squeeze theaters and squeeze out independent producers.<\/p>\n\n\n\n

With the studios\u2019 cartel power weakened, independent filmmakers like Elia Kazan and John Cassavetes flourished in the 1950s, making pictures like \u201cOn the Waterfront<\/a>\u201d that the studios had rejected<\/a>. Foreign films found their ways to American screens no longer constrained by block booking<\/a>, a practice that forced exhibitors to pay for a lot of mediocre films if they wanted the good ones, too.<\/p>\n\n\n\n

By the 1960s, a new generation of filmmakers like Mike Nichols<\/a> and Stanley Kubrick<\/a> scored big with audiences hungry for something different than the escapist spectacles Hollywood was green-lighting. They took risks by hiring respected writers and unknown actors to tell stories that were truer to life. In doing so, they flipped Hollywood\u2019s generic formulas upside down.<\/p>\n\n\n\n

A decade ago, I wrote about how Netflix\u2019s streaming model pointed to a renaissance of innovative storytelling<\/a>, similar to the period after the Paramount Decision.<\/p>\n\n\n\n

By streaming their indie film \u201cBeast of No Nation<\/a>\u201d directly to subscribers at home, Netflix posed a direct threat to Hollywood\u2019s blockbuster model<\/a>, in which studios invested heavily in a small number of big-budget films designed to earn enormous box office returns. At the time, Netflix\u2019s 65 million global subscribers gave it the capital to produce exclusive content for its expanding markets.<\/p>\n\n\n\n

Hollywood quickly closed the streaming gap, developing its own platforms<\/a> and restricting access of its vast catalogs to subscribers.<\/p>\n\n\n\n

Warner Bros. bought and sold<\/h2>\n\n\n\n

In 2018, AT&T acquired Time Warner<\/a>, the biggest media conglomerate of the time, and DirectTV. It hoped to merge its 125 million-plus telecommunication customers with Time Warner\u2019s content and create a streaming giant to compete with Netflix.<\/p>\n\n\n\n

Then came the COVID-19 pandemic, and the theatrical model for film distribution collapsed.<\/p>\n\n\n\n

The pressure on AT&T\u2019s stock led the company to sell off HBO and WarnerMedia to Discovery in 2022 for $43 billion<\/a>. Armed with the HBO and Warner Bros. libraries \u2013 along with the advertising potential of CNN, TNT and Turner Sports \u2013 CEO David Zaslav was bullish about the company\u2019s potential for growth<\/a>.<\/p>\n\n\n\n

Warner Bros. Discovery became the third-largest streaming platform in terms of subscribers behind Netflix and Disney+, which had gobbled up 20th Century Fox<\/a>.<\/p>\n\n\n\n

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