Only a few short years ago the rapid proliferation of streaming video services was starting to open a new frontier for consumers—and with it, greater opportunities for American Latinos and other underrepresented populations, both in front of and behind the camera.
“A wave of new services and the scramble for subscribers have resulted in unprecedented diversity, quality, and value for media consumers,” a Yale Insights article noted in 2022.
Today, that momentum has stalled. Even as more viewers—and more diverse viewers—cut the cord, consolidation is slashing consumer options and squeezing out the once budding representation of American Latino voices in the entertainment industry.
The sale of Warner Brothers Discovery could close the door on consumers further—or help reinvigorate a competitive landscape—depending on who gets it. Which is one of the many reasons antitrust regulators must consider the impact each potential buyer would have on users.
American Latinos are a major and growing audience. Nearly 56 percent of Hispanic viewers get their media through streaming services, about 10 points higher than the national average. They make up almost a quarter of U.S. streaming subscribers and box office ticket sales and, on average, spend more per capita on film and entertainment than any other racial group.
Competitive markets have an unparalleled record of giving consumers what they want. The pandemic accelerated the shift to streamed content, and studio’s sprint to meet demand produced an abundance of choice for viewers—which, in turn, opened up new opportunities for Latinos, women, and minorities historically overlooked by Hollywood.
In 2022 Nielsen reported that 95 percent of Americans were satisfied with their streaming experience, and 93 percent planned to expand or maintain their current plans. That boon translated to more access for underrepresented communities, which “made gains in every film employment arena,” according to an annual UCLA report.
Those gains are quickly diminishing—both for consumers and creators.
A Nielsen survey in November found nearly half of streaming users are willing to cancel their service. Just one percent of this year’s leading streaming shows were created by American Latinos. Only three percent of lead roles and five percent of co-lead roles were portrayed by American Latino actors—an underrepresentation that costs the entertainment industry as much as $18 billion each year.
With two vastly different buyers in contention, Warner Brothers’ sale will determine whether the “streaming wars” remain competitive—and thereby to drive programs created by and for American Latinos and other underserved communities—or whether monopolization will further relegate these groups to the sidelines.
This month Warner Brothers announced that it accepted an offer from Netflix, the largest subscription video on demand provider. The deal would give the world’s biggest streaming platform—whose shortage of American Latino-focused content prompted calls that Netflix “turned its back on us“—unrivaled control over viewers.
The acquisition of Warner Brothers’ 189 million HBO Max subscribers would push Netflix’s viewer base to over 400 million, roughly 50 percent more than Amazon Prime Video’s 315 million. That kind of market control, no matter who commands it, would provide massive latitude to dictate content and gouge prices.
By contrast, Warner Brothers has an offer (several, in fact) from Paramount-Skydance that would establish the resulting entity as a viable competitor to Netflix and the other titans of streaming. A Warner Brothers-Paramount merger would position the company with a large enough viewer base to keep up with the industry leaders, creating a more competitive field and forcing all platforms to deliver better products and services to attract and retain users.
Under the direction of David Ellison, Paramount is one of the few studios investing big in Hollywood—the kind of investment that creates opportunities not only in production, but downstream, as well, in theaters, merchandising, and the host of businesses that depend on film and television.
Paramount’s offer also has a clearer path to approval because it promises to strengthen competition. Both the Biden and Trump administrations have used a 30 percent market share as a threshold for antitrust regulation, which Netflix almost certainly runs afoul of. President Trump himself has said that the chunk of the market Netflix would obtain “could be a problem.” These concerns are now also under direct scrutiny by Congress, as the House Judiciary Committee will hold a hearing this week on the proposed merger.
Competition is the great driver of better products and services, which make the consumer experience. Warner Brother’ sale will determine whether Hollywood remains a place where competition can thrive—and with it, opportunities for underrepresented communities—or whether further consolidation will darken the horizon for consumers and creators alike.
Paramount’s offer represents a market-driven win for consumers. Americans should hope Warner Brothers gives it the consideration it deserves.
Rosa Mendoza is president and CEO of ALLvanza, a nonpartisan policy nonprofit that advocates for all Americans, particularly our youth, primarily on issues related to tech and innovation.