The winner is Paramount, with Netflix's stock price soaring after withdrawal—The decision not to buy reflects the next chapter of the streaming wars.

The winner is Paramount, with Netflix's stock price soaring after withdrawal—The decision not to buy reflects the next chapter of the streaming wars.

The ruler of streaming has deliberately "stepped down from the competition." This alone has garnered applause from the market, while simultaneously reshaping the landscape of Hollywood. The acquisition battle surrounding Warner Bros. Discovery (hereafter referred to as WBD) has progressed to a stage where Paramount Skydance (hereafter referred to as Paramount) has taken the lead, as Netflix refused to make additional bids. The WBD side positioned Paramount's revised proposal as a "superior offer," and although Netflix had the opportunity to present a counterproposal, it swiftly said "no."


1) What Happened: Netflix Withdraws, Paramount Moves Toward "Winning Strategy"

According to reports, Paramount proposed terms for the acquisition of WBD at $31 per share, with a total scale of approximately $111 billion including debt. In response, Netflix declared that the necessary price level was "no longer profitable" and refused to increase their bid, announcing their withdrawal. As a result, WBD ended its agreement with Netflix, paving a wider path for Paramount's proposal.


Netflix co-CEOs Ted Sarandos and Greg Peters stated that while they could have managed WBD's iconic brand well, the deal was "Nice to have at the right price, but not a Must have at any price." This message indicates their decision to prioritize price discipline over acquiring scale through acquisition.


The market reacted sensitively to this withdrawal, with reports indicating that Netflix's stock rose significantly after hours. From an investor's perspective, the interpretation that they "avoided overpaying" appears to be a positive factor.


2) "Partial Purchase" by Netflix vs "Whole" by Paramount: Different Aims

What makes this competition difficult to understand is that the "range of purchase" desired by both companies is not the same. Netflix primarily showed interest in WBD's studio and streaming business, while Paramount is reported to be aiming to incorporate the entire WBD. This means they are considering integration not only of HBO Max and film studios but also news and cable networks.


There is a sense of urgency that strength in streaming alone is no longer sufficient. The idea is to survive with scale and negotiating power through integration, even while carrying the "heavy assets" of traditional media, such as content production, streaming, advertising, news, sports, and theatrical release networks.


3) Pressure on Terms: Penalties and Regulatory Measures as Drivers for Bidding

A feature of Paramount's proposal is reported to include provisions for regulatory risks (compensation if the deal collapses due to regulations) and covering potential costs incurred when canceling the agreement with Netflix. Reports touching on the costs for WBD to dissolve the deal with Netflix indicate that this competition is about more than just price.


In short, Paramount not only "increased the total acquisition amount" but also strengthened conditions to "reduce acquisition uncertainty," creating a structure that makes it easier for WBD's board to say it is "superior."


4) The Biggest Focus: Regulatory (Antitrust) and Political Shadows

When a massive integration progresses, the final hurdle is the regulatory authorities. Reports suggest that the integration of Paramount and WBD, which would bundle studios, streaming, and news simultaneously, could intensify antitrust scrutiny. There is also mention of state authorities continuing their investigations and examinations.


Concerns about political influence are also being reported. The unavoidable question is how the integration of news organizations will affect reporting attitudes and editorial policies.


5) What Happens to Viewers? Price Increases, Monopolies, and the "Home of Works"

What viewers care about, in the end, is "where can I watch the works," "how much will it cost," and "is the service easy to use." As integration progresses, streaming services are bundled, and choices decrease. As choices decrease, the resistance to price increases tends to strengthen—such concerns are also reported as comments from politicians and experts.


Another point of discussion is the "release order." If studios and streaming become more closely tied, the period (window) from theatrical release to streaming and which works are heavily released in theaters may be redesigned. This directly impacts production sites and theaters. Regardless of who the winner is, the field will continue to be wary of "the lifespan of works being shortened for the convenience of streaming."


6) Reactions on Social Media: A Mix of Festive Excitement and Cold Anxiety

 

The news quickly spread on social media, with reactions divided into three main groups.


(A) "Netflix Actually Benefited" Group: Withdrawal Interpreted as Victory
In Reddit's movie community, there is notable sarcastic commentary suggesting that Netflix, by withdrawing, might gain a huge financial burden (penalties, etc.) as a "parting gift," with comments like "Isn't this the most advantageous move?" Additionally, there are speculations about a "long-term strategy" where they might buy cheaply when the opponent is exhausted a few years later.


(B) "Isn't Paramount Overextending?" Group: Doubts About Financial Strength
In the same thread, comments questioning Paramount's debt and profitability are lined up, with views suggesting "this price is driven more by motives other than economic rationality." The large acquisition amount directly leads to distrust that it might be passed on to viewers' fees as a "future burden."


(C) "Media Integration is Scary" Group: Concerns About Price Increases, Diversity, and Politics
The most deep-rooted concern is here. Worries such as "If giant media becomes even larger, the diversity of works will be compromised," and "If news converges under the same capital, editing may become distorted" are also reported as "political impacts" in the media. On social media, even though it's a topic of entertainment, discussions jump to democracy and the independence of reporting. There is an atmosphere of an era where entertainment is no longer "just entertainment."


7) Future Outlook: The Winner is Not Yet Decided

At present, the trend is strong that "Netflix has withdrawn, and Paramount is in a favorable position." However, shareholder procedures and regulatory reviews remain. In other words, from here on, it becomes a "battle to establish the acquisition" rather than a "battle for acquisition."


For Netflix, the market evaluation (stock price reaction) and financial discipline gained from the withdrawal make it easier to steer towards original investments and technology investments. On the other hand, Paramount bears the responsibility of not only talking about the huge integration synergy but also convincing regulatory authorities and public opinion. For viewers, the consolidation and reorganization of services and changes in pricing structures become more realistic, and for production sites, there is a fear that decision-making will be further concentrated in "a few giant companies."


The words "Nice to have/Must have" said by Netflix are not just bargaining phrases. They symbolize the shift in the streaming war from a "battle for subscriber numbers" to a "battle for integration power, including regulation, politics, and public opinion."


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