Netflix co-CEO Ted Sarandos appeared before the US Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights today, , to address concerns surrounding the proposed acquisition of Warner Bros. Discovery (WBD). The hearing, titled “Examining the Competitive Impact of the Proposed Netflix-Warner Brothers Transaction,” focused on whether the $82.7 billion deal – a $72 billion equity value – would create a monopoly in the streaming and movie production landscape.
Sarandos argued that the merger would, counterintuitively, offer consumers more content at a lower price. He pointed to existing overlap in subscriber bases, stating that 80 percent of HBO Max subscribers also subscribe to Netflix. This suggests, according to Sarandos, a complementary relationship rather than a competitive threat. The assertion aims to alleviate concerns that a combined entity would leverage reduced competition to raise prices.
The proposed acquisition comes at a time of significant change in the streaming industry. Netflix currently holds the largest share of the subscription video-on-demand (SVOD) market with 301.63 million subscribers as of January 2025. WBD, through HBO Max and Discovery+, holds the third-largest share with 128 million subscribers. The merger would consolidate significant content creation and distribution power under one roof.
Senator Amy Klobuchar (D-Minnesota) directly questioned Sarandos about the potential for price increases, particularly in light of a Netflix price hike that occurred in January 2025. Klobuchar’s concern reflects a broader anxiety that fewer competitors could lead to less incentive to maintain affordable pricing for consumers.
Sarandos responded by emphasizing the competitive nature of the streaming market and framing previous price increases as being coupled with increased value for subscribers. He highlighted Netflix’s “one-click cancel” policy as a safeguard against consumer dissatisfaction, arguing that subscribers have the power to easily leave the service if they deem the price too high. This ease of cancellation is presented as a key element of market discipline.
Further pressed on pricing, Sarandos maintained that the merger does not present a “concentration risk.” He also stated that Netflix is actively collaborating with the US Department of Justice to establish potential safeguards against future price increases. This suggests a willingness to address regulatory concerns proactively, though the specifics of those “guardrails” remain undefined.
The deal’s progression is not without external factors. Former President Donald Trump has publicly expressed concerns about the merger, while his son-in-law, Jared Kushner, is reportedly backing a competing bid for Paramount. This political dimension adds another layer of complexity to the regulatory review process.
The regulatory path forward remains uncertain. Deadline reported that Netflix is “banking on overcoming the Trump factor” in securing approval for the Warner Bros. Deal. The outcome of the Department of Justice review, and the potential influence of political considerations, will ultimately determine whether the acquisition proceeds.
Five key questions remain unanswered as the deal progresses, according to The Hollywood Reporter. These likely center around the integration of content libraries, the future of HBO Max and Discovery+, potential impacts on content creation budgets, and the overall effect on competition within the streaming ecosystem.
Netflix has also offered a degree of reassurance to its user base, stating that subscribers can cancel their service if the merger with HBO Max results in pricing they find unacceptable. This statement, reported by Ars Technica, appears to be a direct response to consumer anxieties about potential price hikes following the acquisition. It underscores the company’s reliance on its easy cancellation policy as a means of maintaining customer satisfaction and mitigating concerns about market dominance.
The acquisition of Warner Bros. Discovery represents a significant bet on the future of streaming. Whether it will lead to increased value for consumers, as Netflix argues, or to higher prices and reduced competition, remains to be seen. The coming months will be crucial as regulators weigh the potential benefits and risks of this transformative deal.
