Academy Award-winning movie titan James Cameron penned a letter Sen. Mike Lee (R-UT) warning that Netflix acquiring Warner Bros. Discovery could lead to the death of cinema.
In the letter, obtained by CNBC, Cameron warned Lee, who chairs the Senate subcommittee on antitrust, that Netflix successfully acquiring Warner Bros. could lead to the death of movie theaters, exhibition cinema, and the loss of thousands of jobs.
“I believe strongly that the proposed sale of Warner Brothers Discovery to Netflix will be disastrous for the theatrical motion picture business that I have dedicated my life’s work to,” Cameron wrote. “Of course, my films all play in the downstream video markets as well, but my first love is the cinema.”
Cameron, who said his movies employ thousands of people, further warned that if theaters close due to Netflix, the job losses will be catastrophic.
“Theaters will close. Fewer films will be made. The job losses will spiral,” he wrote.
“The business model of Netflix is directly at odds with the theatrical film production and exhibition business, which employs hundreds of thousands of Americans,” he continued. “It is therefore directly at odds with the business model of the Warner Brothers movie division, one of the few remaining major movie studios.”
Cameron further warned that the United States would lose its supremacy as the movie king of the world.
“The U.S. may no longer lead in auto or steel manufacturing, but it is still the world leader in movies. That will change for the worse,” he wrote.
Lee answered in a statement: “We have received outreach from actors, directors, and other interested parties about the proposed Netflix and Warner Brothers merger, and I share many of their concerns. I look forward to holding a follow-up hearing to further address these issues.”
In his opening remarks before the Senate, Ted Sarandos said that the Netflix-Warner Bros. deal “will strengthen the American entertainment industry, preserve choice and value for consumers, and give creators more opportunities,” asserting that the company created 155,000 jobs across all 50 states while contributing “over $225 billion to the U.S. economy over the last 10 years,” per Variety.
On Friday, Senator Lee said he submitted more questions to Netflix and Warner Bros.
Sarandos also said that Netflix would respect Warner Bros. integrity and allow the studio to operate “largely as they are today,” adding that the studio has assets Netflix does not have. By combining both the Netflix library and the HBO Max library, Sarandos said that the company would be offering customers more for less, claiming that 80 percent of HBO Max subscribers currently subscribe to Netflix.
“He also said Netflix faces increasing competition from ‘deep-pocketed tech companies trying to run away with the TV business,’ naming Google’s YouTube, Apple and Amazon’s Prime Video,” continued Variety. “He noted that Netflix’s share of U.S. TV viewership for December was 9% and that with HBO Max will be around 10%, still behind YouTube’s share of TV viewing.”
“Among premium streaming services, according to Sarandos, Netflix has about 18% share in the U.S. while HBO Max has about 3%, meaning the combination would hold about 21%,” it added.
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