In this op-ed, executive chair of Meerkat Media Lee Stephens, breaks down the ins and outs of the Warner Bros and Netflix proposed buyout, Paramount’s hostile retaliation bid and how all of this will impact both Australian media but also Australian cinema.
A seismic shift is underway in the US movie and streaming entertainment industry that will ultimately impact Australian cinema audiences. The future of local cinema attendance and advertising revenues will be influenced by Hollywood restructuring in the next five years.
In true Hollywood style, the sale of Warner Bros/HBO to a suitor is playing out like a cinematic thriller. The actors include the world’s largest subscription streaming platform, a movie studio mogul who is the son of the world’s third richest man, and very real concerns about the future of cinema from Hollywood icons.
Sizing up against each other are Netflix and Paramount. If Netflix wins, the global streaming and subscription market will have an unassailable victor with the ability to turbocharge movie and content production. Paramount needs to win and has deep pockets and powerful friends, but not the support of the Warner/HBO board. In the end, however, it’s the shareholders that decide, not the board.
Regardless of the intrigue, the outcome will shape the future of global cinematic releases and the balance between quality movies developed for cinema and those designed to satisfy the insatiable content appetite of more than one billion streaming accounts globally.
To understand what is at stake, it is important to understand the size of the industry committed to cinematic movie releases. There are just five major studios, each producing 10-15 movies a year, which make up the bulk of annual cinema releases across most parts of the world. There are very different production and growth strategies between these studios.
Disney produces major cinematic releases, however, CEO Bob Iger, has limited production to only Disney franchises such as Marvel, Star Wars and Pixar which are then exclusively distributed via Disney+ after cinematic release. With a rapidly growing top 10 cruise line and the world’s largest theme park operator, Disney is an industry unto its self.
Of the remaining three studios outside Warner/HBO and Disney, Paramount needs HBO the most. Sony and Universal have strong global movie franchises of their own, including the Spider-Universe and Jurassic World, and have diversified businesses outside production, with Universal operating six theme parks globally.
At 79 million subscribers, Paramount+ is a minnow next to HBO (120 million) and Netflix (300 million). By comparison, Paramount+’s reach still skews toward North American audiences, and the studio is seeking to rapidly grow its global footprint.
Equally important is Warner’s significant back catalogue and the corporate IP of Warner Bros to create and distribute profitable blockbusters, whereas Paramount has historically been more cautious with big budget productions. The stakes are enormous for Paramount, and it will not take defeat lying down.
Paramount is pursuing its hostile takeover bid, despite Netflix’s board approval, for good reason. As a truly global business, Netflix is investigating its ability to absorb HBO within various anti-competition regulatory frameworks.
In the US, the deal announcement has attracted reviews by both the US Department of Justice (DOJ) and the Federal Trade Commission (FTC). The EU, UK and Australia’s ACCC have also announced likely scrutiny of the deal. Netflix claims the deal does little to change the video and streaming landscape given YouTube’s global dominance. Paramount argues that Netflix’s framing of competition with free and user-generated content on YouTube is far too wide.
On January 22 this year, Paramount’s hostile bid became far more interesting. Oracle became a 15 per cent owner of the new consortium set to control TikTok USA, alongside a consortium of investment firms. David Ellison is Paramount’s chairman and CEO. His father Larry Ellison is the executive chair and CTO of Oracle and is widely considered the world’s third richest man. Oracle’s responsibility is listed as overseeing “technology and cloud infrastructure”. However, Oracle’s nominated representative to the consortium is telling. Kenneth Glueck’s reported role within Oracle is a key contributor to the company’s global strategy, M&A, corporate communications and the worldwide competitive positioning of all major business units. While there is no indication of collusion between Paramount and TikTok USA, a partnership of some kind would be compelling.
Regardless of the outcome, there are very real consequences for cinematic releases and for the concentration of power among a handful of studios able to create and distribute high-quality movies for cinema. Matt Damon commented in January this year that the structures of streaming movies and those made for cinema are different and not always compatible. In the safe space of cinema, audiences are willing to give greater attention than in-home and mobile streaming environments, with their many distractions. With streaming audience growth showing little sign of maturity, there is real risk of conflict over how movies will be made in the future and for which platform.
The Australian cinema industry is considered a global innovation leader, having quickly repositioned cinema as a high-value night out rather than a low-cost commodity coming out of COVID. Advertising growth, alongside DOOH, has been exceptional and a standout across Australia’s media landscape in 2024 and 2025. Fortunately, there is a solid line-up of high grossing franchise releases in 2026 that can only be fully appreciated on the large screen, supporting cinema’s continued strong advertising growth.
Regardless of who buys Warner/HBO, the future risk is unique. It is not one of theatrical promotion or cinema attendance; it is the potential decrease in cinematic movie supply. Blockbusters will continue to be supported, and franchise releases are growing rapidly as studios squeeze the maximum value from these creative assets. The challenges will be felt most acutely by mid-level cinematic releases, which may go directly to streaming services, have exclusive theatrical windows of as little as two weeks, or be released simultaneously across both platforms.
