Australia’s competition watchdog is likely to closely scrutinise two potential media deals – either of which could be the biggest of all time – because of their wide-ranging impact on local and global entertainment industries.
It’s been 10 days since streaming giant Netflix agreed to buy out the famous Hollywood studio Warner Brothers and its sister TV studio HBO on December 5, a move that would add shows such as The Sopranos, Game of Thrones and Succession, alongside movie franchises such as Harry Potter, to its library.
But the $108 billion deal has a long way to go before it’s finalised, with not only a rival hostile $163 billion bid from new Paramount owner David Ellison in the way, but also a political battle to get Donald Trump on side. Regulatory approval is required from the US President himself.
Locally, the ACCC, Australia’s competition regulator, says it is keeping tabs on media reports surrounding both companies’ attempts to buy Warner Brothers’ Discovery film and television studios and streaming service HBO Max.
“If the parties intend to proceed with a proposed acquisition, it is likely to require notification under the ACCC’s new mandatory merger regime. Details of any review would be posted on the ACCC’s acquisitions register,” the regulator says. The mandatory notification process is set to take effect from January 1, 2026.
Netflix is the largest player in subscription streaming, both globally and in Australia. It has more than 300 million paying subscribers around the world, and 6.4 million in Australia, leaving it well ahead of any close competitor, barring Amazon Prime Video which is attached to Amazon’s wider online business.
Despite Warner Brothers and its suitors primarily operating from the United States, the ACCC is mandated to scrutinise all mergers and deals that will have material impacts on competition and consumers in Australia.
It’s unclear how Netflix will incorporate HBO Max (which launched in Australia earlier this year) into its own operations, though some media reports suggest it would be available as an additional tier on its standalone subscription.
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.
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.
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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Calum Jaspan is a media writer for The Sydney Morning Herald and The Age, based in Melbourne. Reach him securely on Signal @calumjaspan.10Connect via Twitter or email.
