Tuesday, 02 January 2024 12:17 GMT

Subscription Price, New Shows: How The Netflix-Warner Bros. Deal Could Affect UAE Viewers


(MENAFN- Khaleej Times)

The drama and tension from your favourite shows just turned into reality as Netflix and Paramount go head to head in a bid to acquire Hollywood giant Warner Bros. Discovery.

Netflix shocked the industry last week by announcing it had sealed an agreement to buy the Warner Bros. studio, drawing bitter reactions from voices in Hollywood worried about the future of their industry.

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What left cinema lovers at the edge of their seats was when Paramount, on Monday, launched an all-cash tender offer to acquire the giant that also owns CNN, in a challenge to Netflix's own highly contested deal.

Unlike Netflix's offer, Paramount's latest bid includes the buyout of cable channels such as CNN, TNT, TBS and Discovery - which would be added to its group of TV assets like CBS, MTV and Comedy Central.

The offer values the entertainment giant at $108.4 billion and represents a 139 per cent premium over Warner Bros. Discovery (WBD)'s September stock price of $12.54, when the bidding war began.

Paramount in a statement called Netflix's bid, which values Warner Bros. studios at nearly $83 billion, "inferior and uncertain".

The hostile offer sets up a bidding war between Paramount - whose CEO is David Ellison, the son of Larry Ellison, an ally of Donald Trump - and streaming behemoth Netflix.

David Ellison's father Larry, one of the world's richest people, has put up the cash to pay for the buyout, with sovereign wealth companies from Saudi Arabia, Qatar and Abu Dhabi also investors.

Amid the entire fiasco, viewers have been left with questions about what will happen if the takeover does go through and Netflix wins the battle. From subscription prices to creation of jobs, here is how consumers will be impacted by the move.

Will Netflix subscription prices rise in UAE?

The biggest question on users' mind is the monthly subscription fee to access Netflix's wide and diverse selection of shows.

Currently, the platform charges UAE users between Dh35-Dh71 for a subscription plan, with rates differing on the basis of quality, supported devices, number of users, and downloadable gadgets.

Dh35: Basic, 720p

Dh49: Standard, 1080p

Dh71: Premium, 4K + HDR

In 2024, the prices were increased for 'standard' and 'premium' packages, with pre-hike charges faring at Dh39 and Dh62 respectively. After recently adjusting to the increase, many are wondering if there might be a hike again.

According to media reports and expert opinions, there could be a rise in prices with competition likely to reduce.

However, after the deal news broke on Friday, Netflix sent an email to its subscribers stating "both streaming services will continue to operate separately” and that "nothing is changing today".

“Netflix has consolidated itself not just as a top streaming service globally, but it is also now a multibillion-dollar content creator. Consolidation leads to higher market power, so if Netflix increases its library of content and production capability through a Warner Bros. acquisition, it will seek to capture this value in the form of higher subscription prices,” said Nelson Granados, executive director of the Institute for Entertainment, Media, and Sports at Pepperdine Graziadio Business School, while speaking to Yahoo Finance.

“Everything else being equal, Netflix should be able to do so. However, competitors will make moves in response, so it's not clear to me whether they will be able to turn this into higher profits, or just a competitive move to consolidate their position," he added.

Will there be more content options for UAE users?

Netflix, in its announcement of the acquisition, revealed that by adding the deep film, TV libraries, HBO and HBO Max programming, members would get access to "even more high-quality titles" to choose from.

"Beloved franchises, shows and movies such as The Big Bang Theory, The Sopranos, Game of Thrones, The Wizard of Oz and the DC Universe will join Netflix's extensive portfolio including Wednesday, Money Heist, Bridgerton, Adolescence and Extraction, creating an extraordinary entertainment offering for audiences worldwide," said the OTT platform.

This takeover will also allow Netflix to optimise its plans for consumers, enhancing viewing options and expanding access to content.

“Our mission has always been to entertain the world,” said Ted Sarandos, co-CEO of Netflix.“By combining Warner Bros.' incredible library of shows and movies - from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends - with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we'll be able to do that even better. Together, we can give audiences more of what they love and help define the next century of storytelling.”

However, uncertainties remain regarding the type of content. HBO is known for its slow release of famous shows such as White Lotus, Euphoria, and Last of Us, while Netflix is known for dropping the entire season with all episodes at once.

If the deal does go through, Netflix may change the pattern, which pulls viewers away from bing-watching but keeps them looking forward to their favourite show on a weekly basis.

Will Warner Bros. movies still be released in UAE theatres?

The familiar tune of a Warner Bros. movie intro thrumming through a theatre, as the image of the original studio in Hollywood - now known as Sunset Bronson Studios - displays on the screen, morphing into the iconic WB logo has become a universal experience for movie lovers, no matter which corner of the world.

And so, the looming question remains - will we still get to watch these movies in theatres?

In its official statement, Netflix said it "expects to maintain Warner Bros.' current operations and build on its strengths, including theatrical releases for films".

Keeping movies in theaters is a very sensitive issue for the creative industry in Hollywood. Netflix is already viewed negatively in some Hollywood circles, largely due to its reluctance to release content in theaters and its disruption of the industry.

Many veterans consider theatrical releases essential to cinema's appeal and prestige, and also integral to maintaining Hollywood jobs and a vibrant economy.

Have Netflix, Warner Bros responded to Paramount's bid?

Warner Bros. said it would review Paramount's offer, but was not yet modifying its recommendation with respect to Netflix. Netflix co-CEO Ted Sarandos said Paramount's hostile bid for Warner Bros was "entirely expected", but added that he was confident of closing the deal.

Paramount's tender offer will be open for 20 business days and can be extended. Warner Bros has 10 days to respond.

"We're here to fight for value for our shareholders and for WBD shareholders," said David Ellison.

Will there be more jobs?

Regarding the creation of jobs, Netflix has stated the new deal will "enhance its studio capabilities, allowing the company to significantly expand US production capacity and continue to grow investment in original content over the long term which will create jobs and strengthen the entertainment industry".

Emphasising on the creative community that will benefit from this, Netflix said it would create greater value for talent - "offering more opportunities to work with beloved intellectual property, tell new stories and connect with a wider audience than ever before".

After the announcement, Warner Bros. Discovery's share price skyrocketed by more than seven per cent on Monday while shares in Netflix fell by over three per cent.

When will it be implemented in the UAE?

If the deal does go through and Netflix wins the bid, the implementation will take place in 12-18 months, the streaming behemoth revealed.

"The transaction is expected to close after the previously announced separation of WBD's Global Networks division, Discovery Global, into a new publicly-traded company, which is now expected to be completed in Q3 2026."

What will happen to HBO's live TV?

If the deal does fall through, Netflix will be entering the uncharted territory of live TV. Under the acquisition of Discovery Global, a company focused in live television (TNT and TBS), Warner Bros will lose the rights to the NBA, the NHL, MLB, and the USSF, meaning Netflix could potentially move into streaming live sports and events.

With inputs from AFP, Reuters

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Khaleej Times

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