Warner Bros. Bidding

I see that Paramount is now trying a hostile takeover of Warner Bros., to beat Netflix’s offer. I’m sure there are lots of corporate-merger subtleties to it that I don’t understand, but that’s the gist of it.

This whole thing is depressing as all of these mergers will result in more consumer costs and less choice. That’s why we have monopoly rules. Or used to, anyway. The 1996 Telecommunications Act did a ton of damage.

The concept is simple: when you allow vertical integration—when one company owns the movie studios and the theaters, or owns the studios and the streamer as is the model now—the company is incentivized to save money by spending less on the movie/show (product).

If you disallow this, then the producers are incentivized to make the best material for audiences—and the streamers are incentivized to pay the most for it.

But money has corrupted this and it will take a lot to break up the companies.