warner bros. discovery

paramount-tries-to-swipe-warner-bros.-from-netflix-with-a-hostile-takeover

Paramount tries to swipe Warner Bros. from Netflix with a hostile takeover

Although the US Department of Justice (DOJ) holds the power to block mergers that it deems to go against antitrust laws, Trump’s influence over the DOJ can’t be overlooked. While Paramount previously seemed to establish a good relationship with the president, Netflix co-CEO Ted Sarandos may have done the same recently.

Sarandos “spoke with the president in the last couple of weeks in a confab that lasted about two hours,” The Hollywood Reporter reported on Sunday, citing “multiple” anonymous sources. A White House official told the publication that they can’t comment on “private meetings that may or may not have occurred,” and Netflix didn’t respond to the publication’s requests for comment.

Meanwhile, Trump’s relationship with the Ellisons and Paramount may have taken a turn recently. Today, the president lashed out at Paramount over an interview with Rep. Marjorie Taylor Greene (R-Ga.) that aired on the news program 60 Minutes. As he said on Truth Social, per The Hollywood Reporter: “My real problem with the show, however, wasn’t the low IQ traitor, it was that the new ownership of 60 Minutes, Paramount, would allow a show like this to air. THEY ARE NO BETTER THAN THE OLD OWNERSHIP, who just paid me millions of Dollars for FAKE REPORTING about your favorite President, ME! Since they bought it, 60 Minutes has actually gotten WORSE.”

Appealing to the movie theater industry

The movie theater industry is one of the biggest critics of Netflix’s WB acquisition due to fear that the streaming leader won’t release as many movies to theaters for as long and may drive down licensing fees. Paramount is leaning into this trepidation.

As one of the oldest film studios (Paramount was founded as Famous Players Film Company in 1912), Paramount has much deeper ties to the theater business. Ellison claimed that if Paramount and WBD merge, there will be “a greater number of movies in theaters.”

Sarandos said last week that Netflix plans to maintain WBD’s current theater release schedule, which reportedly goes through 2029.

In terms of streaming, Paramount’s announcement pointed to a “combination of Paramount+ and HBO Max,” lending credence to a November report that Paramount would fold HBO Max into its own flagship streaming service if it buys WBD.

With numerous industries, big names, billions of dollars, and politics all at play, the saga of the WBD split and/or merger is only just beginning.

This article was updated on December 8 at 2: 31 p.m. ET with comment from Sarandos. 

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Netflix’s $72B WB acquisition confounds the future of movie theaters, streaming


Netflix’s plans to own HBO Max, DC Comics, Harry Potter to face regulatory scrutiny.

The bidding war is over, and Netflix has been declared the winner.

After flirting with Paramount Skydance and Comcast, Warner Bros. Discovery (WBD) has decided to sell its streaming and movie studios business to Netflix. If approved, the deal is set to overturn the media landscape and create ripples that will affect Hollywood for years.

$72 billion acquisition

Netflix will pay an equity value of $72 billion, or an approximate total enterprise value of $82.7 billion, for Warner Bros. All of WBD has a $60 billion market value, NBC News notes.

The acquisition will take place after WBD completes the split of its streaming and studios businesses, which includes its film and TV libraries and the HBO channel, and its other TV networks, including CNN and TBS, into separate companies (Warner Bros. and Discovery Global, respectively). WBD’s split is expected to finish in Q3 2026.

Additionally, Netflix’s acquisition is subject to regulatory approvals, WBD shareholder approval, and other “customary closing conditions.”

Netflix expects the purchase to net it more subscribers, higher engagement, and “at least $2–3 billion of cost savings per year by the third year,” its announcement said.

Netflix co-CEO Greg Peters said in a statement that Netflix will use its global reach and business model to bring WB content to “a broader audience.”

The announcement didn’t specify what this means for current WBD staff, including WBD’s current president and CEO, David Zaslav. Gunnar Wiedenfels, who is currently CFO of WBD, is expected to be the CEO of Discovery Global after WBD split.

Netflix to own HBO Max

Netflix will have to overcome regulatory hurdles to complete this deal, which would evolve it from a streaming king to an entertainment juggernaut. If completed, the world’s largest streaming service by subscribers (301.63 million as of January) will own its third biggest rival (WBD has 128 million streaming subscribers, most of which are HBO Max users).

The acquisition would also give Netflix power over a mountain of current and incoming titles, including massive global franchises DC Comics, Game of Thrones, and Harry Potter.

If the deal goes through, Netflix said it will incorporate content from WB Studios, HBO Max, and HBO into Netflix. Netflix is expected to keep HBO Max available as a separate service, at least for the near term, Variety reported today. However, it’s easy to see a future where Netflix tries to push subscriptions bundling Netflix and HBO Max before consolidating the services into one product that would likely be more expensive than Netflix is today. Disney is setting the precedent with its bundles of Disney+ and the recently acquired Hulu, and by featuring a Hulu section within the Disney+ app.

Before today’s announcement, industry folks were concerned about Netflix potentially owning that much content while dominating streaming. However, Netflix said today that buying WB would enable it to “significantly expand US production capacity and continue to grow investment in original content over the long term, which will create jobs and strengthen the entertainment industry.”

Uniting Netflix and HBO Max’s libraries could make it easier for streaming subscribers to find content with fewer apps and fewer subscriptions. However, subscribers could also be negatively impacted (especially around pricing) if Netflix gains too much power, both as a streaming company and media rights holder.

In WBD’s most recent earnings report, its streaming business reported $45 million in quarterly earnings before interest, taxes, depreciation, and amortization. Netflix reported a quarterly net income of $2.55 billion in its most recent earnings report.

Netflix hasn’t detailed plans for the HBO cable channel. But given Netflix’s streaming ethos, the linear network may not endure in the long term. But since the HBO brand is valuable, we expect the name to persist, even if it’s just as a section of prestige titles within Netflix.

“A noose around the theatrical marketplace”

Among the stakeholders most in arms about the planned acquisition is the movie theater industry. Netflix’s co-CEO Ted Sarandos has historically seen minimal value in theaters as a distribution method. In April, he said that making movies “for movie theaters, for the communal experience” is “an outmoded idea.”

Today, Sarandos said that under Netflix, all WB movies will still hit theaters as planned, which brings us through 2029, per Variety.

During a conference call today, Sarandos said he has no “opposition to movies in theaters,” adding, per Variety:

My pushback has been mostly in the fact of the long exclusive windows, which we don’t really think are that consumer-friendly. But when we talk about keeping HBO operating, largely as it is, that also includes their output movie deal with Warner Bros., which includes a life cycle that starts in the movie theater, which we’re going to continue to support.

Notably, the executive said that “Netflix movies will take the same strides they have, which is, some of them do have a short run in the theater beforehand.”

Anticipating today’s announcement, the movie theater industry has been pushing for regulatory scrutiny over the sale of WB.

Michael O’Leary, CEO and president of Cinema United, the biggest exhibition trade organization, said in a statement today about the Netflix acquisition:

Regulators must look closely at the specifics of this proposed transaction and understand the negative impact it will have on consumers, exhibition, and the entertainment industry.

In a letter sent to Congress members this month, an anonymous group that described itself as “concerned feature film producers” wrote that Netflix’s purchase of WB would “effectively hold a noose around the theatrical marketplace” by reducing the number of theatrical releases and driving down the price of licensing fees for films after their theatrical release, as reported by Variety.

Up next: Regulatory hurdles

In the coming weeks, we’ll get a clearer idea of how antitrust concerns and politics may affect Netflix’s acquisition plans.

Recently, other media companies, such as Paramount, have been accused of trying to curry favor with US President Donald Trump in order to get deals approved. The US Department of Justice (DOJ) could try to block Netflix’s acquisition of WB. But there’s reason for Netflix and WB to remain optimistic if that happens. In 2017, Time Warner and AT&T successfully defeated the DOJ’s attempted merger block.

Still, Netflix and WB have their work cut out for them, as skepticism around the deal grows. Last month, US Senators Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), and Bernie Sanders (I-Vt.) wrote to the DOJ’s antitrust division urging that any WB deal “is grounded in the law, not President Trump’s political favoritism.”

In a letter to Attorney General Pam Bondi last month, Rep. Darrel Issa (R-Calif.) said that buying WB would “enhance” Netflix’s “unequaled market power” and be “presumptively problematic under antitrust law.”

In a statement about Netflix’s announcement shared by NBC News today, a spokesperson for the California attorney general’s office said:

“The Department of Justice believes further consolidation in markets that are central to American economic life—whether in the financial, airline, grocery, or broadcasting and entertainment markets—does not serve the American economy, consumers, or competition well.”

Netflix’s rivals may also seek to challenge the deal. Attorneys for Paramount questioned the “fairness and adequacy” of WBD’s sales process ahead of today’s announcement.

Photo of Scharon Harding

Scharon is a Senior Technology Reporter at Ars Technica writing news, reviews, and analysis on consumer gadgets and services. She’s been reporting on technology for over 10 years, with bylines at Tom’s Hardware, Channelnomics, and CRN UK.

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Mad Men’s 4K debut botched by HBO Max streaming episode with visible crewmembers

Streaming services have a way of reviving love for old shows, and HBO Max is looking to entice old and new fans with this month’s addition of Mad Men. Instead, viewers have been laughing at the problems with the show’s 4K premiere.

Mad Men ran on the AMC channel for seven seasons from 2007 to 2015. The show had a vintage aesthetic, depicting the 1960s advertising industry in New York City.

Last month, HBO Max announced it would modernize the show by debuting a 4K version. The show originally aired in SD and HD resolutions and had not been previously made available in 4K through other means, such as Blu-ray.

However, viewers were quick to spot problems with HBO Max’s 4K Mad Men stream, the most egregious being visible crew members in the background of a scene.

The episode was “Red in the Face” (Season 1, Episode 7), which was reportedly mislabeled. In it, Roger Sterling (John Slattery) throws up oysters. In the 4K version that was streaming on HBO Max, viewers could see someone pumping a vomit hose to make the fake puke flow.

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higher-prices,-simpler-streaming-expected-if-hbo-max-folds-into-paramount+

Higher prices, simpler streaming expected if HBO Max folds into Paramount+

If a company acquires any form of HBO, one of its top challenges is expected to be streamlining operations while maintaining HBO’s premium brand. This could be especially difficult under a “more mainstream umbrella like Paramount+,” Alderman noted.

Streaming has already diluted the HBO brand somewhat. Through streaming, HBO is now associated with stuff from DC Comics and Cartoon Network, as well as reality shows, like 90 Day Fiancé and Naked and Afraid. Merging with Paramount+ or even Netflix could expand the HBO umbrella further.

That expanded umbrella could allow a company like Paramount to better compete against Netflix, something WBD executives have shied away from. HBO Max is “not everything for everyone in a household,” JB Perrette, WBD’s streaming president and CEO, said this spring.

“What people want from us in a world where they’ve got Netflix and Amazon [Prime Video] are those things that differentiate us,” Casey Bloys, chairman and CEO of HBO and Max content, told The Wall Street Journal in May.

A “stress test” for more streaming mergers

Aside from the impact on HBO Max subscribers, WBD’s merger talks have broad implications. A deal would open the door for much more consolidation in the streaming space, something that experts have been anticipating for some years and that addresses the boom of streaming services. Per Clark, discussions of a Paramount-WBD merger are “less about two studios joining forces and more about a stress test for future M&A.”

If WBD accepts a Paramount bid and that bid clears regulatory hurdles, it would signal that “premium content under fewer umbrellas is back in play,” Clark said.

A Paramount-WBD merger is likely to speed up consolidation among mid-tier players, like NBCUniversal, Lionsgate, and AMC, Alderman said, pointing to these companies’ interest in scaling their streaming businesses and in building differentiated portfolios to counter Netflix and Disney+’s expansive libraries.

If Paramount and WBD don’t merge, Clark expects to see more “piecemeal” strategies, such as rights-sharing, joint venture bundles, and streaming-as-a-service models.

Higher prices, simpler streaming expected if HBO Max folds into Paramount+ Read More »

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HBO Max subscribers lose access to CNN livestream on November 17

HBO Max subscribers will no longer be able to watch CNN from the streaming platform as of November 17, Warner Bros. Discovery (WBD) informed customers today.

After this date, HBO Max subscribers will still be able to watch some CNN content, including shows and documentaries, on demand.

The CNN Max livestream for HBO Max launched as an open beta in September 2023. Since then, it has featured live programming from CNN’s US arm and CNN International, as well as content made specifically for HBO Max.

WBD is pulling HBO Max’s CNN channel as it prepares to launch a standalone CNN streaming service, inevitably introducing more fragmentation to the burgeoning streaming industry. The streaming service is supposed to launch this fall and provide access to original CNN programing and journalism, including “a selection of live channels, catch-up features, and video-on-demand programming,” a May announcement said.

In a statement today, Alex MacCallum, EVP of digital products and services for CNN, said:

CNN has benefitted tremendously from its two years of offering a live 24/7 feed of news to HBO Max customers. We learned from HBO Max’s large base of subscribers what people want and enjoy the most from CNN, and with the launch of our own new streaming subscription offering coming later this fall, we look forward to building off that and growing our audience with this unique, new offering.

WBD will sell subscriptions to CNN’s new streaming service as part of an “All Access” subscription that will include the ability to read paywalled articles on CNN’s website.

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hbo-max-is-“way-underpriced,”-warner-bros.-discovery-ceo-says

HBO Max is “way underpriced,” Warner Bros. Discovery CEO says

Consumers in America would pay twice as much 10 years ago for content. People were spending, on average, $55 for content 10 years ago, and the quality of the content, the amount of content that we’re getting, the spend is 10 or 12 fold and they’re paying dramatically less. I think we want a good deal for consumers, but I think over time, there’s real opportunity, particularly for us, in that quality area, to raise price.

A question of quality

Zaslav is arguing that the quality of the shows and movies on HBO Max warrants an eventual price bump. But, in general, viewers find streaming services are getting less impressive. A Q4 2024 report from TiVo found that the percentage of people who think the streaming services that they use have “moderate to very good quality” has been declining since Q4 2021.

Bar graph From TiVO's Q4 2024 Video Trends report.

From TiVO’s Q4 2024 Video Trends report.

Credit: TiVo

From TiVO’s Q4 2024 Video Trends report. Credit: TiVo

Research also points to people being at their limit when it comes to TV spending. Hub Entertainment Research’s latest “Monetizing Video” study, released last month, found that for consumers, low prices “by far still matters most to the value of a TV service.”

Meanwhile, niche streaming services have been gaining in popularity as streaming subscribers grow bored with the libraries of mainstream streaming platforms and/or feel like they’ve already seen the best of what those services have to offer. Antenna, a research firm focused on consumer subscription services, reported this month that specialty streaming service subscriptions increased 12 percent year over year in 2025 thus far and grew 22 percent in the first half of 2024.

Zaslav would likely claim that HBO Max is an outlier when it comes to streaming library dissatisfaction. Although WBD’s streaming business (which includes Discovery+) turned a $293 million profit and grew subscriber-related revenue (which includes ad revenues) in its most recent earnings report, investors would likely be unhappy if the company rested on its financial laurels. WBD has one of the most profitable streaming businesses, but it still trails far behind Netflix, which posted an operating income of $3.8 billion in its most recent earnings.

Still, increasing prices is rarely welcomed by customers. With many other options for streaming these days (including free ones), HBO Max will have to do more to convince people that it is worth the extra money than merely making the claim.

HBO Max is “way underpriced,” Warner Bros. Discovery CEO says Read More »

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Warner Bros. sues Midjourney to stop AI knockoffs of Batman, Scooby-Doo


AI would’ve gotten away with it too…

Warner Bros. case builds on arguments raised in a Disney/Universal lawsuit.

DVD art for the animated movie Scooby-Doo & Batman: The Brave and the Bold. Credit: Warner Bros. Discovery

Warner Bros. hit Midjourney with a lawsuit Thursday, crafting a complaint that strives to shoot down defenses that the AI company has already raised in a similar lawsuit filed by Disney and Universal Studios earlier this year.

The big film studios have alleged that Midjourney profits off image generation models trained to produce outputs of popular characters. For Disney and Universal, intellectual property rights to pop icons like Darth Vader and the Simpsons were allegedly infringed. And now, the WB complaint defends rights over comic characters like Superman, Wonder Woman, and Batman, as well as characters considered “pillars of pop culture with a lasting impact on generations,” like Scooby-Doo and Bugs Bunny, and modern cartoon characters like Rick and Morty.

“Midjourney brazenly dispenses Warner Bros. Discovery’s intellectual property as if it were its own,” the WB complaint said, accusing Midjourney of allowing subscribers to “pick iconic” copyrighted characters and generate them in “every imaginable scene.”

Planning to seize Midjourney’s profits from allegedly using beloved characters to promote its service, Warner Bros. described Midjourney as “defiant and undeterred” by the Disney/Universal lawsuit. Despite that litigation, WB claimed that Midjourney has recently removed copyright protections in its supposedly shameful ongoing bid for profits. Nothing but a permanent injunction will end Midjourney’s outputs of allegedly “countless infringing images,” WB argued, branding Midjourney’s alleged infringements as “vast, intentional, and unrelenting.”

Examples of closely matching outputs include prompts for “screencaps” showing specific movie frames, a search term that at least one artist, Reid Southen, had optimistically predicted Midjourney would block last year, but it apparently did not.

Here are some examples included in WB’s complaint:

Midjourney’s output for the prompt, “Superman, classic cartoon character, DC comics.”

Midjourney could face devastating financial consequences in a loss. At trial, WB is hoping discovery will show the true extent of Midjourney’s alleged infringement, asking the court for maximum statutory damages, at $150,000 per infringing output. Just 2,000 infringing outputs unearthed could cost Midjourney more than its total revenue for 2024, which was approximately $300 million, the WB complaint said.

Warner Bros. hopes to hobble Midjourney’s best defense

For Midjourney, the WB complaint could potentially hit harder than the Disney/Universal lawsuit. WB’s complaint shows how closely studios are monitoring AI copyright litigation, likely choosing ideal moments to strike when studios feel they can better defend their property. So, while much of WB’s complaint echoes Disney and Universal’s arguments—which Midjourney has already begun defending against—IP attorney Randy McCarthy suggested in statements provided to Ars that WB also looked for seemingly smart ways to potentially overcome some of Midjourney’s best defenses when filing its complaint.

WB likely took note when Midjourney filed its response to the Disney/Universal lawsuit last month, arguing that its system is “trained on billions of publicly available images” and generates images not by retrieving a copy of an image in its database but based on “complex statistical relationships between visual features and words in the text-image pairs are encoded within the model.”

This defense could allow Midjourney to avoid claims that it copied WB images and distributes copies through its models. But hoping to dodge this defense, WB didn’t argue that Midjourney retains copies of its images. Rather, the entertainment giant raised a more nuanced argument that:

Midjourney used software, servers, and other technology to store and fix data associated with Warner Bros. Discovery’s Copyrighted Works in such a manner that those works are thereby embodied in the model, from which Midjourney is then able to generate, reproduce, publicly display, and distribute unlimited “copies” and “derivative works” of Warner Bros. Discovery’s works as defined by the Copyright Act.”

McCarthy noted that WB’s argument pushes the court to at least consider that even though “Midjourney does not store copies of the works in its model,” its system “nonetheless accesses the data relating to the works that are stored by Midjourney’s system.”

“This seems to be a very clever way to counter MJ’s ‘statistical pattern analysis’ arguments,” McCarthy said.

If it’s a winning argument, that could give WB a path to wipe Midjourney’s models. WB argued that each time Midjourney provides a “substantially new” version of its image generator, it “repeats this process.” And that ongoing activity—due to Midjourney’s initial allegedly “massive copying” of WB works—allows Midjourney to “further reproduce, publicly display, publicly perform, and distribute image and video outputs that are identical or virtually identical to Warner Bros. Discovery’s Copyrighted Works in response to simple prompts from subscribers.”

Perhaps further strengthening the WB’s argument, the lawsuit noted that Midjourney promotes allegedly infringing outputs on its 24/7 YouTube channel and appears to have plans to compete with traditional TV and streaming services. Asking the court to block Midjourney’s outputs instead, WB claims it’s already been “substantially and irreparably harmed” and risks further damages if the AI image generator is left unchecked.

As alleged proof that the AI company knows its tool is being used to infringe WB property, WB pointed to Midjourney’s own Discord server and subreddit, where users post outputs depicting WB characters and share tips to help others do the same. They also called out Midjourney’s “Explore” page, which allows users to drop a WB-referencing output into the prompt field to generate similar images.

“It is hard to imagine copyright infringement that is any more willful than what Midjourney is doing here,” the WB complaint said.

WB and Midjourney did not immediately respond to Ars’ request to comment.

Midjourney slammed for promising “fewer blocked jobs”

McCarthy noted that WB’s legal strategy differs in other ways from the arguments Midjourney’s already weighed in the Disney/Universal lawsuit.

The WB complaint also anticipates Midjourney’s likely defense that users are generating infringing outputs, not Midjourney, which could invalidate any charges of direct copyright infringement.

In the Disney/Universal lawsuit, Midjourney argued that courts have recently found that AI tools referencing copyrighted works is “a quintessentially transformative fair use,” accusing studios of trying to censor “an instrument for user expression.” They claim that Midjourney cannot know about infringing outputs unless studios use the company’s DMCA process, while noting that subscribers have “any number of legitimate, noninfringing grounds to create images incorporating characters from popular culture,” including “non-commercial fan art, experimentation and ideation, and social commentary and criticism.”

To avoid losing on that front, the WB complaint doesn’t depend on a ruling that Midjourney directly infringed copyrights. Instead, the complaint “more fully” emphasizes how Midjourney may be “secondarily liable for infringement via contributory, inducement and/or vicarious liability by inducing its users to directly infringe,” McCarthy suggested.

Additionally, WB’s complaint “seems to be emphasizing” that Midjourney “allegedly has the technical means to prevent its system from accepting prompts that directly reference copyrighted characters,” and “that would prevent infringing outputs from being displayed,” McCarthy said.

The complaint noted that Midjourney is in full control of what outputs can be generated. Noting that Midjourney “temporarily refused to ‘animate'” outputs of WB characters after launching video generations, the lawsuit appears to have been filed in response to Midjourney “deliberately” removing those protections and then announcing that subscribers would experience “fewer blocked jobs.”

Together, these arguments “appear to be intended to lead to the inference that Midjourney is willfully enticing its users to infringe,” McCarthy said.

WB’s complaint details simple user prompts that generate allegedly infringing outputs without any need to manipulate the system. The ease of generating popular characters seems to make Midjourney a destination for users frustrated by other AI image generators that make it harder to generate infringing outputs, WB alleged.

On top of that, Midjourney also infringes copyrights by generating WB characters, “even in response to generic prompts like ‘classic comic book superhero battle.'” And while Midjourney has seemingly taken steps to block WB characters from appearing on its “Explore” page, where users can find inspiration for prompts, these guardrails aren’t perfect, but rather “spotty and suspicious,” WB alleged. Supposedly, searches for correctly spelled character names like “Batman” are blocked, but any user who accidentally or intentionally mispells a character’s name like “Batma” can learn an easy way to work around that block.

Additionally, WB alleged, “the outputs often contain extensive nuance and detail, background elements, costumes, and accessories beyond what was specified in the prompt.” And every time that Midjourney outputs an allegedly infringing image, it “also trains on the outputs it has generated,” the lawsuit noted, creating a never-ending cycle of continually enhanced AI fakes of pop icons.

Midjourney could slow down the cycle and “minimize” these allegedly infringing outputs, if it cannot automatically block them all, WB suggested. But instead, “Midjourney has made a calculated and profit-driven decision to offer zero protection for copyright owners even though Midjourney knows about the breathtaking scope of its piracy and copyright infringement,” WB alleged.

Fearing a supposed scheme to replace WB in the market by stealing its best-known characters, WB accused Midjourney of willfully allowing WB characters to be generated in order to “generate more money for Midjourney” to potentially compete in streaming markets.

Midjourney will remove protections “on a whim”

As Midjourney’s efforts to expand its features escalate, WB claimed that trust is lost. Even if Midjourney takes steps to address rightsholders’ concerns, WB argued, studios must remain watchful of every upgrade, since apparently, “Midjourney can and will remove copyright protection measures on a whim.”

The complaint noted that Midjourney just this week announced “plans to continue deploying new versions” of its image generator, promising to make it easier to search for and save popular artists’ styles—updating a feature that many artists loathe.

Without an injunction, Midjourney’s alleged infringement could interfere with WB’s licensing opportunities for its content, while “illegally and unfairly” diverting customers who buy WB products like posters, wall art, prints, and coloring books, the complaint said.

Perhaps Midjourney’s strongest defense could be efforts to prove that WB benefits from its image generator. In the Disney/Universal lawsuit, Midjourney pointed out that studios “benefit from generative AI models,” claiming that “many dozens of Midjourney subscribers are associated with” Disney and Universal corporate email addresses. If WB corporate email addresses are found among subscribers, Midjourney could claim that WB is trying to “have it both ways” by “seeking to profit” from AI tools while preventing Midjourney and its subscribers from doing the same.

McCarthy suggested it’s too soon to say how the WB battle will play out, but Midjourney’s response will reveal how it intends to shift tactics to avoid courts potentially picking apart its defense of its training data, while keeping any blame for copyright-infringing outputs squarely on users.

“As with the Disney/Universal lawsuit, we need to wait to see how Midjourney answers these latest allegations,” McCarthy said. “It is definitely an interesting development that will have widespread implications for many sectors of our society.”

Photo of Ashley Belanger

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

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Longer commercial breaks lower the value of ad-based streaming subscriptions

But that old promise to HBO Max subscribers hasn’t carried over to Max, even though WBD is renaming Max to HBO Max this summer. As PCWorld noted, Max has been showing ads during HBO original content like The Last of Us. The publication reported seeing three ad breaks during the show in addition to ads before the show started.

Ars Technica reached out to WBD for comment about these changes but didn’t receive a response ahead of publication.

Depleting value

With numerous streaming services launching over the past few years, many streaming customers have been pushed to subscribe to multiple streaming services to have access to all of the shows and movies that they want. Streaming providers also regularly increase subscription fees and implement password crackdowns, and ad-based subscriptions were supposed to offer a cheaper way to stream.

Streaming providers forcing subscribers to watch more commercials risk depleting the value of ad-based streaming tiers. Online, for example, people are questioning the value of their ad-based Max subscriptions, which start at $10 per month, compared to $17 per month for ad-free Max.

“I don’t how it could be worse. I watched several HBO documentaries, and they already had more adverts than Pluto TV [a free, ad-supported streaming service]. The kids programs for Cartoon Network started out with few adverts, but they have been loading up on adverts,” a Reddit user said in response to Max showing more ads.

Another Reddit user said that “if [Max] has ads, it shouldn’t be $10/month.”

Beyond Max, PCWorld cited MediaRadar data finding that Disney+ shows over 5.3 minutes of ads per hour, and Hulu shows over seven minutes of commercials hourly.

Such lengthy commercial breaks can extend past a convenient snack or bathroom break and force subscribers to consider the value of their time and how much time they want to allocate to get through a 22-minute program, for example.

With linear TV reportedly showing 13 to 16 minutes of commercials per hour, though, streaming providers still have space to show even more ads while still claiming that they show fewer ads than alternatives.

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Warner Bros. Discovery makes still more changes, will split streaming, TV business

Warner Bros. Discovery will split its business into two publicly traded companies, with one focused on its streaming and studios business and the other on its television network businesses, including CNN and Discovery.

The US media giant said the move would unlock value for shareholders as well as create opportunities for both businesses, breaking up a group created just three years ago from the merger of Warner Media and Discovery.

Warner Bros. Discovery last year revealed its intent to split its business in two, a plan first reported by the Financial Times in July last year. The company intends to complete the split by the middle of next year.

The move comes on the heels of a similar move by rival Comcast, which last year announced plans to spin off its television networks, including CNBC and MSNBC, into a separate company.

US media giants are seeking to split their faster growing streaming businesses from their legacy television networks, which are facing the prospect of long-term decline as viewers turn away from traditional television.

Warner Bros. Discovery shares were more than 10 percent higher pre-market.

David Zaslav, chief executive of Warner Bros. Discovery, will head the streaming and studios arm, while chief financial officer Gunnar Wiedenfels will serve as president and chief executive of global networks. Both will continue in their present roles until the separation.

Zaslav said on Monday the split would result in a “sharper focus” and enhanced “strategic flexibility,” that would leave each company better placed to compete in “today’s evolving media landscape.”

Warner Bros. Discovery Chair Samuel A. Di Piazza Jr. said the move would “enhance shareholder value.”

The streaming and studios arm will consist of Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, as well as their film and television libraries.

Global networks will include entertainment, sports, and news television brands around the world, including CNN, TNT Sports in the US, and Discovery.

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“They curdle like milk”: WB DVDs from 2006–2008 are rotting away in their cases

Although digital media has surpassed physical media in popularity, there are still plenty of reasons for movie buffs and TV fans to hold onto, and even continue buying, DVDs. With physical media, owners are assured that they’ll always be able to play their favorite titles, so long as they take care of their discs. While digital copies are sometimes abruptly ripped away from viewers, physical media owners don’t have to worry about a corporation ruining their Friday night movie plans. At least, that’s what we thought.

It turns out that if your DVD collection includes titles distributed by Warner Bros. Home Entertainment, the home movie distribution arm of Warner Bros. Discovery (WBD), you may one day open up the box to find a case of DVD rot.

Recently, Chris Bumbray, editor-in-chief of movie news and reviews site JoBlo, detailed what would be a harrowing experience for any film collector. He said he recently tried to play his Passage to Marseille DVD, but “after about an hour, the disc simply stopped working.” He said “the same thing happened” with Across the Pacific. Bumbray bought a new DVD player but still wasn’t able to play his Desperate Journey disc. The latter case was especially alarming because, like a lot of classic films and shows, the title isn’t available as a digital copy.

DVDs, if taken care of properly, should last for 30 to up to 100 years. It turned out that the problems that Bumbray had weren’t due to a DVD player or poor DVD maintenance. In a statement to JoBlo shared on Tuesday, WBD confirmed widespread complaints about DVDs manufactured between 2006 and 2008. The statement said:

Warner Bros. Home Entertainment is aware of potential issues affecting select DVD titles manufactured between 2006 – 2008, and the company has been actively working with consumers to replace defective discs.

Where possible, the defective discs have been replaced with the same title. However, as some of the affected titles are no longer in print or the rights have expired, consumers have been offered an exchange for a title of like-value.

Consumers with affected product can contact the customer support team at [email protected].

Collectors have known about this problem for years

It’s helpful that WBD recently provided some clarity about this situation, but its statement to JoBlo appears to be the first time the company has publicly acknowledged the disc problems. This is despite DVD collectors lamenting early onset disc rot for years, including via YouTube and online forums.

“They curdle like milk”: WB DVDs from 2006–2008 are rotting away in their cases Read More »

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Disney, Fox, and WBD give up on controversial sports streaming app Venu

Although Fubo’s lawsuit against the JV appears to be settled, other rivals in sports television seemed intent on continuing to fight Venu.

In a January 9 letter (PDF) to US District Judge Margaret M. Garnett of the Southern District in New York, who granted Fubo’s premliminary injunction against Venu, Michael Hartman, general counsel and chief external affairs officer for DirectTV, wrote that Fubo’s settlement “does nothing to resolve the underlying antitrust violations at issue.” Hartman asked the court to maintain the preliminary injunction against the app’s launch.

“The preliminary injunction has protected consumers and distributors alike from the JV Defendant’s scheme to ‘capture demand,’ ‘suppress’ potentially competitive sports bundles, and impose consumer price hikes,” the letter says, adding that DirectTV would continue to explore its options regarding the JV “and other anticompetitive harms.”

Similarly, Pantelis Michalopoulos, counsel for EchoStar Corporation, which owns Dish, penned a letter (PDF) to Garnett on January 7, claiming the members of the JV “purchased their way out of their antitrust violation.” Michalopoulos added that the JV defendants “should not be able to pay their way into erasing the Court’s carefully reasoned decision” to temporarily block Venu’s launch.

In addition to Fubo, DirecTV, and Dish, ACA Connects (a trade association for small- to medium-sized telecommunication service providers) publicly expressed concerns about Venu. NFL was also reported to be worried about the implications of the venture.

Now, the three giants behind Venu are throwing in the towel and abandoning an app that could have garnered a lot of subscribers tired of hopping around apps, channels, and subscriptions to watch all the sports content they wanted. But they’re also avoiding a lot of litigation and potential backlash in the process.

Disney, Fox, and WBD give up on controversial sports streaming app Venu Read More »

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Max needs higher prices, more ads to help support WBD’s flailing businesses

At the same time, the rest of WBD is in a period of duress as the cable and movie industries struggle. Films like Beetlejuice Beetlejuice failed to reach the same success as last year’s Barbie, sending WBD studios’ revenue down 17 percent and its theatrical revenue down 40 percent. As WBD CEO David Zaslav put it:

Inconsistency also remains an issue at our Motion Picture Studio, as reinforced recently by the disappointing results of Joker 2.

Some things that helped buoy WBD’s legacy businesses won’t be around the next time WBD execs speak to investors. This includes revenue from distributing the Olympics in Europe and gains from the Hollywood writers’ and actors’ strikes ending. With WBD’s networks business also understandably down, WBD’s overall revenue decreased 3 percent YoY. It’s natural for the company to lean more on its strongest leg (streaming) to help support the others.

WBD wants more streaming M&As

Today, Zaslav reiterated earlier stated beliefs that the burgeoning streaming industry needs more mergers and acquisitions activity to maintain profitability. He discussed complications for users, who have to consider various services’ pricing and are “Googling where a show is, or where a sport is, and you’re going from one to another, and there’s so many.” He added:

It’s not sustainable. And there probably should have been more meaningful consolidation… You’re starting to see fairly large players saying, ‘Hey, maybe I should be a part of you. Or maybe I should be a part of somebody else.’

Zaslav said that it’s too early to know if Donald Trump’s presidency will boost these interests. But he suggested that the incoming administration “may offer a pace of change and an opportunity for consolidation that may be quite different [and] that would provide a real positive and accelerated impact on this industry that’s needed.”

It’s also too early to know if streaming consolidation would help subscribers fed up with rising prices and growing ad loads. But for now, that’s about all we can bet on from streaming services like Max.

Max needs higher prices, more ads to help support WBD’s flailing businesses Read More »