00:00Let's just go back to whether or not any of these will get through regulatory approval.
00:05Let's start with Paramount buying Warner Brothers Discovery. Does it cut legal muster, do you think?
00:11Well, all three of the bidders, remember there was Comcast in there to begin with, have overlaps with Warner Brothers.
00:18If you think about three buckets of, say, content production, streaming, and then channels or networks,
00:24they all overlap. And Paramount in particular has a lot of production studio kinds of assets,
00:32particularly because, of course, Paramount merged with Skydance first.
00:35So that's a big issue for them. And they have a significant share of streaming as well.
00:40You served as Deputy Assistant Attorney General for Economic Analysis, Chief Economist.
00:43You basically helped with antitrust division in your time.
00:47When ultimately it comes down to it, the courts are going to say, who's the competitor here?
00:52Do you think it's right that they bulk in YouTube and new ways of consuming content,
00:57even TikTok, versus us all be on linear and certainly on cable?
01:02Yes, I think this is the tricky thing for the Paramount bid.
01:06I mean, we all understand what producing content is,
01:09and I think we have a pretty good grip on who does that and why it's different
01:13and what sort of market there is there.
01:15Streaming, however, is much trickier because we have user-produced funny cat videos.
01:23We have user-produced videos that actually sustain those users in terms of income.
01:28We have professionally produced short things, professionally produced long things.
01:32And so we're getting a kind of a continuum of content.
01:35And that includes YouTube, as you point out, which has a big chunk of that continuum.
01:40And it's going to be very difficult to draw the line on what is what we call the relevant market,
01:46which in antitrust is what matters because that's where you get head-to-end competitors.
01:50It feels as though Netflix, for its part, which thus far is meant to be the frontrunner for buying Warner Brothers,
01:57or at least the streaming and the studio side of it,
02:00they've tried to frontrun this sort of argument by making clear they think the market competitors are YouTube
02:06and they are TikTok and they are just where our eyeballs are at.
02:09Who do they need to convince in this?
02:11Because many would say, oh, the Ellicons have got the ear of the administration,
02:14but really it's the courts.
02:17That's right.
02:17The president can say he wants the Ellicons to have it
02:20and he can say that about his friends or the people who give him money
02:24or silence the voices that he doesn't want to hear.
02:28But ultimately, we have a law in the United States that can be enforced
02:32not only by the federal public authorities, but the states and actually by private plaintiffs as well.
02:38And so if there's some harm to competition and that can be shown by a state or a private plaintiff,
02:44then they can go to court and try to block the transaction just like the federal government can.
02:49And indeed, we have seen states, coalitions of states being very active in antitrust lately
02:54when they have felt that the federal government is not doing a good job.
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