Streaming Wars, from Murdoch and Disney to Netflix’s Hollywood takeover – now a three-way battle for the gates
Netflix grows a nose and torches Disney. Copyright prompts by Mike, image generated by Wombo.
TL;DR
The entertainment industry rarely stands still. But every so often, a single transaction redefines the competitive landscape, bringing with it a delicious irony.
Netflix’s agreement to acquire Warner Bros Discovery’s studio and streaming operations in an US$83bn deal (mostly funded with debt) is one of those turning points.
It doesn’t just shift the balance of power. It marks the point when streaming graduates from disruptor to owner of Hollywood’s most valuable cultural assets. Yup, if successful, software would finally eat Hollywood along with everything else.
But the twist is that Netflix’s ascension comes mid-battle, not after the dust settles. Because now:
Netflix has a friendly, negotiated takeover on the table (that excludes the cable assets that would be sold/housed separately).
Paramount, backed by David and Larry Ellison, has launched a hostile all-cash counterattack for the entire company (including cable).
Unsurprisingly, Donald Trump has signalled concerns about Netflix’s market share.
Antitrust dynamics suddenly sit centre-stage.
The future of Hollywood is now being fought out in the open, including boardrooms, cable networks, algorithms, and, oddly, the campaign trail.
And the winner becomes the 21st-century media fortress.
Now, for the background, the causes, the effects, and where this Episode is heading.
Episode I, Murdoch’s exit, Disney’s rise and how we got here
This Nextflix moment didn’t arrive out of nowhere. Far from it.
Back in 2017, I wrote about a pivotal turning point in “Murdoch’s dump is Disney’s pump” which you can read again here:
That piece explored how Rupert Murdoch’s decision to part with 21st Century Fox’s Hollywood assets handed Disney a media stronghold packed full of franchises and production capabilities. It supercharged Disney+ and signalled that legacy media was ready to reshape the competitive landscape rather than surrender it.
At the same time, Netflix was preparing for its own fight. In “Nextflix to spend US$15.7bn (just over 20% of its market value) to retain competitive advantage,” I highlighted the scale of commitment Netflix needed to maintain global leadership. You can read it again here.
The formula then was simple: spend, grow, build, fight to retain in the event of being outspent.
That transaction lit the fuse for the Steaming Wars.
Episode II, Fragmentation and escalation
The middle years of the Streaming Wars brought fragmentation. Disney, Amazon, Apple, Paramount and Comcast all launched platforms. Although the Murdoch deal did deliver Disney control of Hulu.
Content spending reached historic highs as each player attempted to out-produce and out-position the others.
But, as in every industry, economics eventually caught up. Subscriber growth slowed. Production costs surged. Investors sought discipline.
The industry edged toward three choices, namely scale, consolidation, or specialisation.
Then COVID arrived, distorting the signals and masking just how fierce the battle had become.
Eight years after Murdoch’s well-timed exit, we reach today’s decisive shift.
Episode III, Netflix’s Warner Bros deal, Paramount’s ambush, and the return of the studio-platform empire
Netflix’s agreement to buy Warner Bros Discovery’s studios and streaming businesses is far more than an acquisition. If successful, it will fuse three powerful pillars under one roof, creating a LVMH-style house of brands in film and TV and an almost impregnable media fortress:
World-class IP in Harry Potter, Batman, DC, and HBO’s premium catalogue.
Physical studio infrastructure brining an unparalleled production engine that shaped a century of film and television.
Digital distribution through Netflix’s 260+ million-strong streaming base.
With its existing assets and digital infrastructure, it would have a post-transaction moat that would be hard to match.
And then it went sideways
Paramount has now countered with a hostile all-cash US$30/share bid for the entire Warner Bros Discovery empire, including CNN, TNT, TBS, Discovery and all cable assets that Netflix deliberately avoided.
It’s a full-scale consolidation play. Netflix is buying the engine. Paramount wants the entire fortress, crumbling walls and all.
Financially, the calculus is whether Netflix proposal (cash and shares) + separate sale of cable is greater or less than the all-cash Paramount proposal for the entire kingdom.
The political layer? Donald Trump has already flagged concerns about Netflix gaining too much market share. Paramount’s financing links include Jared Kushner’s firm and several sovereign investors.
Antitrust hawks will be circling both deals for different reasons.
This has become a three-way contest Netflix vs Paramount vs Regulators (with Trump & sons somewhere in the middle).
The irony is extraordinary. A streaming-native giant now stands poised to control:
the most valuable modern IP library.
the physical production ecosystem that creates it.
the global digital network that monetises it instantly.
It is the first true full-stack model built for the 21st century.
But only if it survives Paramount’s ambush, and any others.
Five reasons this could redefine the entertainment industry
(Consolidation is accelerating) as the era of platform proliferation is over. Scale and catalogue strength are the new gatekeepers.
(Predictability returns through evergreen IP) because evergreen franchises provide predictability in a volatile marketplace. Netflix would acquire some of the strongest cultural assets in circulation.
(The studio-platform hybrid returns to uplevel entry barriers) with a Netflix deal, “Old Hollywood” logic, i.e., own creation, own catalogue, own distribution would be reborn but rebuilt globally across both physical and digital worlds. A target for Meta?
(A new empire forms if the deal holds) because Netflix becomes a dual-form giant, i.e., a digital powerhouse and a traditional studio owner. Paramount’s counteroffer is a signal of how high the stakes really are.
(The fortress versus castle moment) comes from Netflix’s potential configuration eclipsing Disney’s castle model entirely. Scale, IP, production and global distribution would be fused into one fortress.
In short, if this deal goes through, Netflix becomes the most dominant physical/digital media fortress.
Long-term corporate development pays off
My 2017 pieces captured the early signs of this transformation, led by Netflix but catalysed by Rupert Murdoch.
Murdoch enabled Disney’s surge.
Disney never fully capitalised.
COVID exposed the fragility.
The industry escalated into a decade-long arms race, a content equivalent of today’s AI infrastructure war.
Netflix spent over 20% of its then market value to defend its position. Now, five times larger, it is again attempting to spend roughly 20% of its value to acquire one of Hollywood’s golden age crown jewels.
But the Streaming Wars are not ending. We’re just entering a new chapter.
Episode IV – The studio gates, AI-generated content, and a battle not yet decided
In Episode IV, the most powerful digital platform may own the studio gates, but it faces a hostile counterbid from Paramount, political scrutiny, and the competitive recalculations of every other media titan.
AI-generated content is no longer an existential threat It’s simply another competitive layer to absorb. And in the wings, the losing bidders will regroup, seek partnerships, and call in help from the White House, if and where they can.
Netflix? Paramount? Someone else?
The next chapter hasn’t been written.
But it will be delicious to some and abhorrent to others.
In the meantime, and maybe for a long time, if Netflix prevails the once scrappy newcomer becomes an impregnable entertainment fortress.
The irony is so thick you could carve it with a broken wizard’s wand.
See you in the market as this story develops.
Mike
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