Ted Sarandos walked into a Senate hearing on streaming consolidation and basically said: we already own these customers.
Netflix's co-CEO told lawmakers that 80% of HBO Max subscribers also subscribe to Netflix, arguing the proposed merger between the two services would simply give existing customers more content under one roof. His message to regulators worried about consumer choice? People can always cancel.
That's consolidation arrogance dressed up as consumer empowerment.
The hearing focused on whether allowing Netflix to acquire HBO Max would reduce competition and lead to price increases. Sarandos argued the opposite, claiming the combined service would offer more content at a better value proposition than maintaining two separate subscriptions.
But here's what the 80% overlap really means: Netflix has already captured the premium streaming audience. They're not competing for new customers. They're positioning to eliminate the one competitor that still commands premium pricing for prestige content.
Warner Bros. Discovery, HBO Max's parent company, has struggled to scale the service profitably while maintaining HBO's content quality standards. Netflix, meanwhile, has 260 million global subscribers and the cash flow to outbid everyone for talent.
The "just cancel" argument doesn't hold up under scrutiny. When Spotify and Apple Music dominate music streaming, consumers can't meaningfully "just cancel" without losing access to most recorded music. The same dynamic applies to video streaming as the market consolidates.
Senators pressed Sarandos on pricing commitments. He offered none. Netflix has raised prices consistently over the past decade, from $7.99 to $15.49 for its standard plan. Why would adding HBO Max's content library make them charge less?
The merger isn't final, and regulatory approval remains uncertain. But Sarandos' testimony revealed Netflix's strategic thinking: they believe they've already won the streaming war. The HBO Max acquisition would just formalize that victory.
