Netflix co-CEO Ted Sarandos told US senators that subscribers unhappy with potential price increases after acquiring Warner Bros. Discovery can simply cancel their subscriptions.
Speaking at a Senate Judiciary antitrust hearing on February 3, Sarandos defended the proposed acquisition of WBD's streaming (HBO Max) and studio operations. "We are a one-click cancel, so if the consumer says, 'That's too much for what I'm getting,' they can cancel with one click," he said.
The comment landed poorly with Senator Amy Klobuchar, who pressed Sarandos on how Netflix would keep streaming "affordable" after the merger, especially given Netflix's January 2025 price hike despite subscriber growth.
Sarandos' core argument: Netflix and HBO Max overlap heavily, with 80% of Max subscribers already using Netflix. The merger would consolidate content onto Netflix's platform at lower per-hour costs rather than eliminate competition. He claimed Netflix subscribers pay 35 cents per hour of content watched versus 90 cents for Paramount+ (though MoffettNathanson's January data put Netflix at 34 cents and Paramount+ at 76 cents).
The deal would combine the largest subscription streaming service (301.63 million subscribers) with the third-largest (128 million across Max and Discovery+). Sarandos downplayed monopoly concerns by citing YouTube's higher TV viewership share (12.7% versus Netflix's 9% in December) and positioning the merger as defensive against "deep-pocketed tech companies" like Google, Apple, and Amazon.
What this means in practice: The "just cancel" argument is classic monopoly playbook—present choice as theoretical while building market position that makes alternatives less viable. Worth noting: Netflix is negotiating potential price-increase guardrails with the Department of Justice, suggesting regulators see concentration risk despite Sarandos' testimony.
The real test comes when procurement and content licensing decisions hit the industry. If the deal closes, watch how quickly smaller streaming services lose Warner content libraries and whether bundled pricing actually materializes. History suggests consolidation doesn't typically make things cheaper.