Previously, HBO’s popular programming line-up was available through Foxtel’s entertainment subscription streaming service Binge, but it lost the rights to new releases like The White Lotus and The Last of Us, as well as its deep back catalogue, when HBO Max arrived in the local market.
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Netflix’s deal does not include Warner Brothers’ cable television networks, a far less valuable suite of assets, which were due to be spun off into a separate company, regardless of any deal. Paramount is proposing to buy all the company’s assets, which includes news service CNN, and create billions of dollars in “efficiencies”, meaning thousands of job cuts.
Netflix’s market capitalisation of $654 billion is already more than double the next media player in Disney at $300 billion.
A hostile takeover means Ellison and his partners are taking their proposal directly to shareholders, in hopes of convincing them their offer is better value for their shares. Ellison has argued his offer provides a cleaner cash transaction, however the source of the funds for the deal are raising questions. It’s backed via his father, Oracle owner Larry Ellison, as well as a firm led by Jared Kushner (the US president’s son-in-law), and three Arab monarchies: Qatar, Saudi Arabia and the United Arab Emirates.
Donald Trump, Jared Kushner and Larry Ellison have close ties which could help sway the deal in Paramount’s favour.Credit: AP
While Ellison has sought to position Netflix’s deal as a threat to competition, with a monopolistic giant acquiring the third- or fourth-most powerful player in the streaming industry, Netflix executives have instead positioned themselves as competing in a wider battle for audience attention, screen time and consumption against the likes of TikTok, YouTube, broadcast television and other digital platforms.
Netflix says its deal would take it from 8 per cent to 9 per cent of total consumption of viewing hours in the US, according to Nielsen data.
Applying this argument to Australia, Netflix accounts for 9.3 per cent of TV consumption in Australia, according to OzTam’s Streamscape report. OzTam is owned by the commercial free-to-air networks, and this particular report overstates free-to-air consumption in comparison to other measurements such as the ACMA How we watch and listen to content report in 2024. OzTam reports 59.8 per cent of all viewing in Australia is of free-to-air television, and just 30.9 per cent is digital video (streaming and YouTube).
In America, streaming dominates, accounting for more than 40 per cent of all consumption, with YouTube leading the way, followed by Netflix. HBO Max’s footprint remains marginal in Australia and is not reflected in the OzTam data. YouTube is ranked at 7.7 per cent of viewing.
As Netflix and Paramount scramble for a win, their future rests with Trump. Both company’s CEOs, Netflix’s Ted Sarandos and Paramount’s Ellison, reportedly have friendly relations with the president.
Trump’s only comment so far has been to say the Netflix deal “could be a problem.” The question is, will the lure of a potential move to make CNN into a second pro-Trump news outlet under Paramount be enough to sway him, or will Netflix’s global might prevail?
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