How Netflix's Potential Acquisition Of Warner Bros. Discovery Affects M-Net, DStv And Showmax?

Not long ago, it was reported that Netflix won the bid to acquire Warner Bros. Discovery valuing the deal at $72 billion. This deal would DC Entertainment/Studios, Cartoon Network Studios, HBO, Warner Bros. Pictures/Television and New Line Cinema.

Below is a how this deal is bad news for MultiChoice

M-Net and Showmax

MultiChoice had been licensing Game Of Thrones and Penguins from HBO to M-Net and Showmax. In the event of an acquisition, Netflix had expressed interest to continue these partnerships with local broadcasters but it may not be easy.

If MultiChoice continues to license content from Warner Bros. they could as well look to increase the rates. This is something MultiChoice's new owners Canal+ may not find amusing as they've begun cost cutting due to DStv's shrinking consumer base.

Besides that, the previous owners at MultiChoice had been anti-Netflix for sometime so the general audience had sort of painted a certain image of the company. While free-to-air broadcasters such as SABC and eMedia Investments had been licensing from the streamer.

MultiChoice put up a wall between them and Netflix again this was the previous owners regime as Canal+ does view them as partners. They do have an agreement to bundle their services in francophone markets alongside a content deal through K+.

The reality is while Warner Bros. continues to license content to M-Net and Showmax, Netflix will likely make further productions exclusive to their services. If they do continue licensing, I doubt MultiChoice would want their scraps.

Netflix is already available in the market which further complicates things as M-Net and Showmax are meant to go hand in hand with their content. But then again, MultiChoice is part of StudioCanal's parent company which gives them leverage.

Netflix may offer Stranger Things, Squid Games and Wednesday but with Canal+'s MultiChoice there's Paris Has Fallen, Spinners and iShaka iLembe.

DStv

For this part, I feel there's a lot of exaggeration as Netflix is not acquiring Discovery, TLC or the linear Cartoon Network as that is being spun off into a separate company. Of course, Netflix's bid to be frank sort of dilutes the value of Cartoon Network.

Cartoon Network under Discovery Global will be leaning more toward third party programming such as Lego Ninjago, Dragonball Super and Totally Spies!. While what made Cartoon Network, Nickelodeon and Disney "The Big 3" like Regular Show and Tiny Toons Looniversity goes to Netflix.

It's likely that they will be a licensing agreement for these shows but they'll most definitely be like DreamWorks Channel - reruns. Under a separate company, they're not going to prioritise on these Netflix originals.

If it is deemed expensive these shows could as well get phased out and again that just dilutes Cartoon Network who had been reliant on these IPs.

Turning over the torch to Discovery Global, this is the company that MultiChoice is involved in a carriage dispute with over the future of its 12 channels. These include Discovery Channel, HGTV, TLC and as mentioned the linear Cartoon Network.

Of course, the matter of concern here to me is that as mentioned with Cartoon Network while the Netflix deal makes the company more leaner. There's still another 20 billion worth of debt they need to clean out.

Expecting for content to be reduced, potential sales or closures to operations or channels and lastly massive layoffs particularly for international feeds.

All of this might as well unfold while these channels are no longer on DStv but then again it's likely that MultiChoice could opt to keep a few channels. My guess would be Discovery Channel, TLC, Cartoon Network, Real Time, Cartoonito, ID and CNN.