The old “streaming wars” are over; the “attention wars” have begun. In the new battle, Netflix’s strategic acquisition of Warner Bros’ Discovery makes perfect sense. While the streaming company has been a formidable disrupter when it comes to the distribution of content, it is still a relatively nascent competitor when it comes to content production.
Netflix’s primary vulnerability is the absence of a deep, centennial library. Without a century of “evergreen” content, it remains at a structural disadvantage against incumbent media giants. Sixty percent of TV time is dedicated to legacy content and old favorites, according to National Research Group’s 2024 Future of Series.
Other services have over a century of content to stream and license. The Walt Disney Company, with its Disney+ service, recently celebrated its 100th anniversary. Paramount Pictures, with its own streaming service, Paramount+, is even older. Similarly, Amazon made its own strategic purchase of MGM in 2022, granting it the rights to decades of films and shows.
Netflix has only a little over a decade of in-house content to offer viewers. While it has found success with hits like House of Cards, Orange Is the New Black, and Stranger Things, its library pales in comparison to those of the more established cinematic juggernauts.
For antitrust regulators reviewing the deal, the raw number of subscribers offers a snapshot of the competitive landscape, but it fails to tell the whole story. Total hours watched will be a better indicator of what consumers consider substitutes, says John M. Yun, professor and economist at George Mason University’s Antonin Scalia Law School. Professor Yun rightly points to the district court decision in the Federal Trade Commission’s antitrust case against Meta, where the court held that “total time spent” is the best measure of market share in the modern digital economy. Under this framework, a combined Netflix-Warner Bros. would be judged by its share of “attention,” a metric that more accurately captures its true market power.
As others have noted, there is overlap between the subscriber bases of Netflix and HBO Max, the flagship streaming service of Warner Bros. The combined service would likely provide a lower price, increased convenience and better recommendations to those already subscribed to both.
Evaluating Netflix’s acquisition of Warner Bros. Discovery also requires shifting the focus from simple subscriber growth toward a one centered on audience engagement and total time spent across various media formats. This should include social media too. While “second-screening,” the habit of scrolling on a smartphone while watching TV, is already common, the lines between the two screens are only going to get blurrier.
YouTube offers a triple threat to competition: free ad-supported titles; movie rentals; and a massive amount of user-generated content that consumers can watch on their television set. Seeing this success, TikTok and Instagram are vying to claim their own share of the living room screen. Both platforms have launched dedicated TV apps, and TikTok has leaned into the “big screen” experience by rolling out TV-casting features and supporting long-form video.
Netflix faces fierce competition from the future and the past.
Unlike Disney and Paramount, Netflix lacks the centennial library of evergreen content, which still accounts for 60 percent of viewing time. This vulnerability echoes, though not perfectly, the thwarted Blockbuster/Hollywood Video merger. Regulators then fixated on the number of physical stores, missing the shift towards digital delivery. Netflix must acquire the legacy it lacks to compete with both Hollywood’s history and Big Tech’s future.
