MICHEL MARTIN, HOST:
Netflix this morning announced a deal to buy one of Hollywood's top companies, Warner Bros. Discovery. It's valued at around $80 billion. Netflix is already a dominant player, and this would create an entertainment and streaming behemoth. CNN and other cable channels owned by Warner Bros. are not part of the deal and will be spun off. NPR media correspondent David Folkenflik is here on a snowy Friday to tell us more. And he's with us now. Good morning.
DAVID FOLKENFLIK, BYLINE: Good morning, Michel.
MARTIN: So tell us more about this deal.
FOLKENFLIK: Well, it's an enormous deal. You're seeing Netflix take in, essentially, HBO's streaming service and absorb all of Warner Bros.' past IP and the archives of their film. It's supersizing what was already the dominant player in Hollywood.
MARTIN: You were telling me earlier that this changes the contours of Hollywood. Can you say more about that?
FOLKENFLIK: Well, Netflix is clearly showing it wants to be the Amazon of entertainment. It also has had over the years a strong corporate ethos that we don't buy, we make. We do things ourselves. We may acquire individual projects, but we're not buying, you know, huge studios and things like that. And this one, they're saying, we're going to go all-in here. We want to block others from maybe being able to compete with us as much. We want to be a dominant force, as well, both in terms of talent and in terms of the intellectual property, but also in terms of reaching the streamers and the consumers. Let's not forget; Netflix is already the world's largest streaming service. Here, they're saying, well, we're going to be a mega studio, as well.
MARTIN: You know, we've been hearing for weeks - I mean, people who follow the trades - right? - which is not everybody, but we've been hearing for weeks that the Ellisons, the billionaires Larry and David - David, who owned Paramount Global - had the inside track to buy all of Warner Bros. Discovery. So can you - do you know anything about, like, what happened? How big of a surprise is this?
FOLKENFLIK: Well, until, I'd say, about 48, 72 hours ago, it would be a complete shock, in part because of Netflix's predilection that maybe they want to do it, but they generally (ph) disposed not, and in part because Paramount was sending all the body language, this is ours for the taking. They have an inside deal to the Trump White House, which is - you know, political considerations are important, which we can talk about in a moment. They also have the money. Larry Ellison, you know, the co-founder of Oracle, is one of the few most wealthy people on the planet. They've got billions to spend. They want to combine it with Paramount, the parent company of CBS. Paramount's dreaming to take on Netflix, to compete with them.
And Netflix swoops in and just buys the elements that are clearly profitable. It's leaving hanging in the balance, as we saw happen through Comcast divesting itself of MSNBC and other cable channels very recently - it's leaving these more precarious so-called linear channels - their future in the balance, and it's taking the ones that are clearly the future and what's going to be the profits. The Ellisons had basically said, it's going to be ours. Then in recent days, you saw David Ellison withdraw from an appearance at New York Times' DealBook on Wednesday, and you saw them send a note to the board basically saying, we're going to challenge and perhaps make a hostile takeover bid if they go in a different direction, signaling they were worried that they weren't getting a fair deal.
MARTIN: Very briefly, like all bid deals, this has to go through antitrust review. How likely is this to go through?
FOLKENFLIK: I think it's a real question. You know, Trump has indicated he's a populist, but really, it's a question of who's in and who's out. The Ellisons are very much in favor at the White House right now. And yet, there is plenty of reason to challenge this on antitrust grounds - not only a question of the studios doing business or filmmakers having to do business with Netflix, but individual consumers having to pay potentially more for this combined HBO-Netflix deal. You could see state attorneys general, you could see the Justice Department taking real issues there.
MARTIN: That is NPR's David Folkenflik. David, thank you so much.
FOLKENFLIK: You bet. Transcript provided by NPR, Copyright NPR.
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