People have been announcing the death of Hollywood for decades, usually while pointing their fingers at whatever new threat looms largest at the time. Television, home video, prestige cable, YouTube, streaming: each has been nominated as the undertaker-in-waiting for the studio system.
Yet the industry rarely expires on cue. Instead, like the supernatural creature in a horror movie, it reconstitutes itself, often in forms its previous custodians would scarcely recognise.
Long before anyone coined the term “streaming revolution”, the studios endured an upheaval that remade the business from the ground up.
The antitrust actions that fractured the old studio system in the mid-20th century remain foundational to any understanding of how Hollywood works today.
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The issue was vertical integration. The major studios not only produced and distributed films, they owned large theatre chains, exerting control over every step of a film’s commercial life.
This model shielded them from normal competitive pressures and enabled practices like block booking and blind bidding, which forced exhibitors to take entire slates rather than select individual titles.
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The US department of justice challenged these arrangements, culminating in a 1948 Supreme Court ruling that compelled studios to divest their theatres and abandon exclusionary contracts.
Many film historians argue that this brought an end to Hollywood’s golden age. The loss of guaranteed exhibition upended the economics that supported the star system, the prestige picture and the efficient production pipelines that defined the era.
Without vertical integration, revenues became less predictable and the studios’ appetite for long-term talent deals and large standing crews diminished.
Others see the same moment as the beginning of a more open creative landscape. Once freed from multiyear studio contracts, actors, directors and writers gained leverage to move between projects and negotiate terms. Independent producers, no longer blocked from national exhibition, carved out space for films that diverged from the major studios’ formulas. The resulting diversity of voices and subjects paved the way for the auteur-driven filmmaking of later decades.
But the Supreme Court decision did not kill the studios. Paramount, Fox and most of the others survived, though often smaller and periodically absorbed into larger corporate structures.
The Warner deal, if it goes through, gives Netflix access to a rich back catalogue encompassing 100 years of movie history
In the end, whatever remained of mid-century antitrust enforcement was substantially rolled back during the Reagan administration.
Fast forward to the 21st century, where a different species of disruption reshaped the industry. Streaming dismantled familiar distribution patterns and eroded long-established revenue assumptions. Emerging from the pandemic in particular, the studios found themselves weakened while the biggest streaming platforms consolidated power.
Against that backdrop, last week’s announcement that Netflix had reached an agreement with Warner Bros Discovery to buy Warner Bros Studios, HBO and Max for $83 billion (€72 billion) marks either the beginning of a new chapter or the conclusion of a century-long story.
The deal surprised many who had expected a rival bid from Paramount to prevail, not least because of Paramount owner Larry Ellison’s well-advertised ties to Donald Trump. The US president weighed in on Sunday, observing that the arrangement might breach competition rules on market share for a single operator.
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And on Monday, Paramount announced it was going around the Warner Discovery board to mount a hostile takeover bid with what it said was a better price for Warner shareholders. Unlike Netflix, Paramount is seeking to buy the entire company, including cable TV assets like CNN and the Discovery Channel.
Trump has made clear the decision will cross his desk at some point, so the outcome of this story is far from guaranteed.
And Hollywood is not happy. Film-makers, actors and technicians fear consolidation will squeeze production budgets and narrow commissioning appetites. Cinema operators expect Netflix to adopt its customary two-week theatrical window for Warners releases, a move that would further undercut an already fragile exhibition ecosystem.
The Writers Guild of America declared: “This merger must be blocked. The world’s largest streaming company swallowing one of its biggest competitors is exactly what antitrust laws were designed to prevent.”
Shares in major US cinema chains dropped 8 per cent on Friday. Despite assurances from Netflix co-chief executive Ted Sarandos that nothing will change in Warners’ theatrical strategy, many will remain sceptical.
One reason for the widespread surprise at the deal is that, despite its meteoric rise to become the world’s default streaming platform, Netflix has refrained from major acquisitions up to now. Unlike its main rival Disney, which turbocharged its content offering by acquiring 21st Century Fox along with valuable intellectual properties like Star Wars to the Marvel Cinematic Universe, Netflix’s purchases have been modest.
The Warner deal, if it goes through, gives Netflix access to a rich back catalogue encompassing 100 years of movie history from The Wizard of Oz to Dune, along with modern franchises such as Harry Potter and Batman and prestige series like Succession and Game of Thrones. Add in sitcoms like Friends, which have become streaming staples, and you can see the attraction.
Whatever about the history of Hollywood, some industry observers see this as a potential turning point in the history of Netflix, as the company matures from its growth-at-all-costs stage into a business more focused on retaining the market dominance it currently enjoys and increasing average revenue per user via ad sales and new premium subscription tiers.
In a streaming market with high rates of subscriber churn, the company has successfully established itself as the basic package that everyone feels they need to have. It has done so with a canny but not particularly inspiring programming mix that means you can usually find something to pass the time.
As the company prepares to roll out the final instalments of its biggest hit, Stranger Things, over Christmas, it may feel like an opportune moment to turn the page. Whether that involves killing Hollywood – again – in the process remains to be seen.
