Citing the growing power of Disney, Amazon and Netflix in an age of mergers and acquisitions spurred on by Wall Street cheerleading, Writers Guild of America (WGA) has called for government regulation of streaming, probes into anti-competitive practices, and blocks to further consolidation.
A WGA report published today, ‘The New Gatekeepers – How Disney, Amazon, and Netflix Will Take Over Media’, highlights how the streamers have gone from an initial period of some increased competition and an unprecedented diversity in film and television to positioning themselves as the alpha players of the entertainment sphere who choose what gets made, who sees it, and how.
This activity, says the report, which comes on the 108th day of the writers strike, offers ”an alarming window into the future of media”. It continues, ”The path to this future will be charted by snowballing consolidation; less creativity, choice, and innovation in content; increased downward pressure on writer pay; and higher prices for consumers.”
It continues, “Pay and working conditions for writers have become so dire, and media conglomerates so unresponsive, that 11,500 writers went on strike in May 2023. Without intervention, these conglomerates will seize control of the media landscape and the streaming era’s advances for creativity and choice will be lost.”
The study report notes how vertical integration has resulted in a situation where entertainment companies need production and streaming distribution to be competitive and “new entrants, smaller competitors, and independent producers” face increased pressure.
It also posits that further consolidation will lead to “more reactive consolidation” and references Wall Street analysts’ predictions that companies like Paramount, Sony, and Warner Bros. Discovery “will be candidates for consolidation”.
The summarises the corporate activity of the three major streamers as follows:
- Disney has grown through a series of multibillion-dollar acquisitions, using its power to reduce film output, shut down competing studios, foreclose independent content from its distribution networks, expand control of the labor market, and force creators to give up financial participation in future licensing revenue.
- Amazon has gained a sizeable footprint in media in a short time by utilizing the well-documented playbook critical to its ascendance as a tech company. Though anticompetitive behavior and vertical integration, Amazon has harmed competitors, privileged its related business, and abused employer leverage to underpay writers.
- Netflix was once an innovative competitor, but is now using its position as the largest streaming service in the world to abuse its leverage as an employer, decrease innovative content spending and raise prices for consumers. The company has cut out independent producers and severely underpaid writers in multiple areas, and a series of recent acquisitions signal its intent to further increase dominance and market power in order to reduce innovative content investment.
Disney acquired Marvel Studios, Lucasfilm and Pixar for a combined cost of approximately $15bn in the early 2000s, and more recently the entertainment assets of 20th Century Fox in a 2019 deal worth $71.3bn.Amazon acquired MGM in for $8.5bn.
Netflix has been snapping up smaller entities like Roald Dahl Story Company for $686m, and Australia’s Animal Logic for an undisclosed sum as it builds up its animation business.
In summary, the WGA is calling for anti-trust agencies and lawmakers to implement three checks:
- Blocks on further entertainment consolidation “involving significant streaming players…including acquisitions of smaller or potential competitors”;
- Investigation into anti-competitive issues and outcomes “including merger outcomes that have reduced competition, how vertical integration is increasing the power of these gatekeeper firms, and the monopsony power of media employers”; and
- Increased regulation and oversight of streaming, including a consideration of new rules mandating a level of independent content on streaming services.
Screen has reached out Disney, Netflix and Amazon for comment.
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