Netflix's $72 Billion Gamble: Can It Outstream YouTube?

Netflix plans to acquire Warner Bros Discovery to challenge YouTube's dominance. The proposed $72 billion merger faces regulatory scrutiny, as experts doubt the Justice Department will view Netflix and YouTube as direct competitors. Antitrust enforcers scrutinize such deals, citing previous cases of market competition reduction.

Netflix aims to acquire Warner Bros Discovery in a $72 billion deal, positioning itself to compete against YouTube. However, antitrust experts are skeptical, doubting that regulators will consider Netflix and YouTube as direct competitors due to their differing content, audience, and business models.

Currently boasting 428 million subscribers combined with HBO Max, Netflix argues the merger is essential to challenge YouTube, America's most-watched TV distributor. Yet, the DOJ is unlikely to see YouTube's user-generated content as interchangeable with Netflix's original series, like 'Stranger Things' and 'KPop Demon Hunters.'

Experts highlight prior cases where regulators scrutinized market competition, such as the Whole Foods and Wild Oats merger. Netflix's internal competition analyses, if ignoring YouTube, could undermine its case, as it seeks the merger to reduce prices and bundle services, though DOJ skepticism remains high.

(With inputs from agencies.)