By Dom Serafini
On the strength of my My 2¢ track record, I’m venturing to make a few predictions: Comcast will not be acquiring Warner Bros. Discovery. It’s simply too costly if one adds all the liabilities ($53 billion) and the cost of the stock ($31.34 billion and a possible premium). Plus, it’s not needed just to get its streaming platform, HBO Max.
Plus, the streaming service war will end soon — before they all cannibalize each other. After all, streaming will become like cinema releases. The new box office will be the amount of TVoDs, or number of subscribers driven by a particular movie or TV series. It’s not like studios are constantly buying and selling each other based on their box office results, right?
In effect, the U.S. will be going back to the pre-1948 “Paramount Decrees” era, when the large Hollywood studios controlled the motion picture industry through their ownership of film distribution and exhibition.
Today, streaming constitutes a form of distribution that replaces or replicates theatrical distribution, as was the case prior to 1948. Now, it’s called “platform exclusivity.”
Plus, the studios are not expected to be interested in creating semi-monopolies with the risk of, once again, triggering government actions that could result not only in having to divest themselves of their streaming platform, but also their broadcast TV networks.
The world would be happy to see the studios fragmented. Producers would be in the front row looking for more revenues. Politicians would be waiting for some big, flamboyant issue to tackle. And Wall Street would already be savoring their huge fees.
Meanwhile, the House of Representatives, part of the U.S. Congress, has already approved a package of antitrust measures covering the major tech firms.
Getting the U.S. Department of Justice (DOJ), and/or the E.U. antitrust Commission (DG Competition) after the U.S. studios for “restraint of trade” could be another brick falling on the head of streamers (in addition to the current financial burden).
As mentioned above, there is a 1948 precedent for that: the “Paramount Decrees” (so called because it was the largest of the Hollywood studios). Here’s the story: In 1938, the DOJ filed a lawsuit alleging that eight major studios had conspired to control the motion picture industry through their ownership of film distribution and exhibition. The case reached the U.S. Supreme Court in 1948, which forced all of the studios to divest themselves of their movie theater chains. The Court also outlawed various motion picture distribution practices, including exclusive film licenses for specific geographic areas.
In 2020, believing the antitrust restriction was no longer necessary, as the old model could never be recreated in contemporary settings, the DOJ issued a “sunsetting” (phasing out) notice.
However, according to some legal experts, the “restraint of trade” is now exercised through the “platform exclusivity” that the U.S. studios require for their own “exhibition,” which takes the form of subscription television, otherwise called “streaming,” SVoD (or simply on-demand), and generically, OTT.
This feature first appeared in the VideoAge Daily at MIPCOM 2022