To The Moon

🚨 $Netflix(NFLX)$ Buying $Warner Bros. Discovery(WBD)$ for $82.7B 🚨

This is an ERA-Ending Transformational Deal!

The "small-upstart" that was once "doomed to lose" to Hollywood giants once they took streaming seriously, is buying out the biggest, most storied, and most famous movie studio, Warner Bros, and the "King of Premium Television" HBO.

If 5 years ago you had told media "experts" and Wall Street analysts that Netflix would buy Warner Bros, they would have asked, "What are you smoking, and where can I get some"?

Yet here we are.

So what does this mean, and what are the implications?

🔴 The Losers:

1) The Consumer

There is no doubt about it. Content quality will go down, and prices will go up.

2) Cinemas were already dead, but this will only accelerate it.

Whatever guarantees and promises Netflix gives to "keep the theatrical release" are BS and are not worth the paper they are written on. They are 100% lying and will only honor current contracts, but all future movies will be on streaming faster than ever before.

Who will go to the cinema, pay $30 for a ticket and popcorn, if you can watch the same movie on Netflix in a month? Nobody.

There are around 38,000 cinema screens in the US. I predict half will close in the next 5 years.

3) California and Hollywood.

You can expect the unions, politicians, and Hollywood elite to aggressively lobby against this. Netflix could never do this during a Democrat administration because California and Hollywood have power there.

Not only does Trump not give a F, he actively hates California and Dems. I don't see him going against this deal.

Netflix will move all production out of California, because it is too expensive and the quality is low. They will move it to Georgia, Florida, Texas, and overseas.

4) Disney

$Walt Disney(DIS)$ execution has been absolutely dog shit in the streaming era. They were projected to "overtake Netflix within 5 years". Yet, they are nowhere near that level.

Why would consumers subscribe to Disney+ now?

Netflix will have so much content, and now they have real, old-school Hollywood IP.

They make so many DC cartoons, TV shows, and movies, and they will be dog shit. But people will watch because it will be on Netflix.

Distribution is everything.

5) Cable bundle:

This will accelerate cord-cutting.

The Winners:

1) NFLX Shareholders, despite the stock being down slightly, this is a good deal for the company. The truth is that WBD was not able to unlock the value of its content library because its streaming service lacked scale. Can you imagine the watch time Harry Potter, Batman, The Matrix, Game of Thrones, and The Sopranos would get on Netflix?

Retention instantly goes through the roof.

So does the pricing power.

You can expect them to do HBO on Netflix for an extra $9.99.

This deal positions them to reach that $1T target, the company talked about those memos that were leaked a few months ago.

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