Cinema United told Congress on Wednesday that it has concerns about the sale of Warner Bros., arguing that losing a major studio will result in fewer movies, job losses and theater closures. In a letter to the House Judiciary Subcommittee on the Administrative State, Regulatory Reform and Antitrust, the exception industry trade group focused much of its attention on the threat that Netflix could pose to their business, noting the streaming service’s skepticism about the cinema business.
“We are deeply concerned that this acquisition of Warner Bros. by Netflix will have a direct and irreversible negative impact on movie theaters around the world,” the group writes. “Such an acquisition
will further consolidate control over production and distribution of motion pictures in the hands
of a single, dominant, global streaming platform in a market that is already highly concentrated.
The impact will not only be felt by theater owners, but by movie fans and surrounding businesses
in communities of all sizes.”
However, it stressed that if Netflix falters and Paramount — which is trying to outmaneuver the streaming giant — buys Warner Bros., that also presents challenges.
“If Paramount or another major studio ends up displacing Netflix as the buyer, our concerns are no less serious,” the group writes. “A combination of Paramount and Warner Bros., for instance, would consolidate as much as 40% of each year’s domestic box office in the hands of a single dominant studio.”
When Netflix announced that it had a deal in place to buy Warner Bros. and HBO Max for $82.7 billion, the company’s co-CEO Ted Sarandos said it would honor the studio’s existing theatrical commitments. Yet, he couched that, arguing that time windows, industry parlance for the amount of time movies play exclusively in theaters, will “evolve” in a way that is more “consumer friendly.”
“If Netflix’s proposed acquisition of Warner Bros. is not challenged, the threat to our members is grave —and possibly even existential — given its hostility toward exhibition,” the group writes. “Netflix described theatrical distribution ‘outmoded,’ and restated their goal that they make movies exclusively for Netflix members distributed primarily on Netflix, not in theaters.”
Cinema United notes that since 2023, the average theatrical window for Netflix films has been 11 to 17 days, which is in contrast to major studio films that have an average window of 46 days in 2024 and 58 days in 2023.
In general, Cinema United sounded skeptical that any sale of Warner Bros. to a competitor benefits the cinema business. It noted that there have been several mergers in recent years, including Amazon’s purchase of MGM and Disney’s acquisition of Fox, and that the new companies often released fewer films. In Disney’s case, the group says “the entities produced about half the movies they did annually pre-merger.”
Cinema United argues that if movie theaters go under, the economic impact will be felt in a much wider way.
“Movie theaters are cultural and economic anchors of their communities — to repeat, we are a Main Street industry. That is what is at risk here if we sanction fewer movies in the marketplace. Theaters will close, communities will suffer, jobs will be lost.”
