SHARE OF MIND: WHY ANTITRUST LAW FAILS THE STREAMING SUPER LIBRARY

This post is authored by Mahi Singh and Shrey Bhatnagar, fifth-year B.A. LL.B (Hons.) students at Chanakya National Law University, Patna.

INTRODUCTION

The current streaming entertainment market is undergoing a shift from a fragmented industry towards consolidation centred around Netflix. Although the past decade has been marked by streaming wars characterised by price elasticity and the multiplicity of services, the proposed acquisition of Warner Bros. Discovery (WBD) by Netflix, Inc., valued at approximately USD 82.7 billion, signals a fundamental shift.

This transaction is not merely a horizontal consolidation of assets but represents a foreclosure of competition through library acquisition. The authors argue that this occurs through three mechanisms: first, by withdrawing must-have content from the licensing market; second, by raising rivals' costs through exclusivity arrangements over generational Intellectual Properties; and third, by leveraging accumulated consumer data to create artificial switching costs. Together, these mechanisms will redefine the competitive structure of the industry, a claim this piece substantiates through the lens of India's merger control framework, behavioural economics, and consumer protection law.

While immediate media attention may have been towards the transaction structure: USD 27.75 per share, with each WBD shareholder receiving a mix of USD 23.25 in cash and USD 4.50 in stock, the significance lies elsewhere. The deal structurally consolidates the two most valuable content ecosystems in the global streaming market under a single entity, raising serious questions about the long-term viability of rival platforms and the diversity of cultural production available to consumers.

Earlier, the industry resembled pieces of a cultural puzzle, with different players offering wide choices and unique legacy indicators on every platform. By integrating WBD’s must-have content libraries comprising the DC Universe, Harry Potter, Game of Thrones, and the HBO prestige catalogue into Netflix’s dominant distribution ecosystem, the merged entity creates a ‘Super Library’ that renders rival platforms non-viable.

Unlike commodity products, specific Intellectual Properties like Friends, DC Universe, Harry Potter, HBO’s prestige catalogue are generational touchstones whose value cannot be replicated. New content takes decades to reach the generational touchstone status that WBD assets already possess. Without access to engaging WBD content, smaller or regional platforms may struggle to reach the critical mass needed to survive. This situation will leave the market heavily tilted toward the dominant entity.

THE REGULATORY CHALLENGE

The regulatory challenge lies in the mismatch between how existing competition law measures harm and how this merger actually causes it. India's ‘consumer welfare standard,’ which focuses primarily on price and output effects, is not enough to assess the effects of merging global cultural libraries.

In India, the Competition (Amendment) Act, 2023, introduced the Deal Value Threshold (DVT) of INR 2,000 crore (~240 million) as a proviso to Section 5(c) of the Competition Act, 2002, requiring mandatory CCI notification for transactions where the target has Substantial Business Operations in India (SBOI) satisfied if 10% of users are in India or turnover exceeds INR 500 crore thereby expanding merger scrutiny beyond traditional asset/turnover thresholds. While the Netflix−WBD deal (82.7 billion) easily triggers this notification requirement.

However, a critical gap remains. WBD’s direct revenue in India might be moderate due to previous licensing models (e.g., to JioCinema), rather than direct subscriptions; its direct revenue might be moderate by conventional measures. However, this modesty is a function of the business model, not the market impact. A purely revenue-based analysis, therefore, structurally underestimates WBD's true competitive significance in the Indian market, which is precisely the gap that the 'share of mind' framework, proposed below, is designed to address.

As competition scholarship notes, the consumer welfare standard risks concluding that the merger causes no harm simply because financial figures appear moderate. This ignores the competitive reality: owning Harry Potter creates a higher barrier to entry than high revenue alone, because exclusive control over generational Intellectual Property forecloses rivals from building viable alternative libraries. The current law fails precisely because it equates a dollar of revenue from selling soap with a dollar of revenue from selling cultural narratives.

ADDRESSING THE GAP

To address this gap, the authors propose a Cultural Threshold for merger control in media sectors. World Intellectual Property Organisation’s (WIPO) analysis of streaming markets discusses how consolidation of exclusive content libraries creates 'cultural thresholds' barriers to entry for rival platforms that cannot replicate the audience engagement commanded by legacy Intellectual Properties.

This threshold can be measured by local engagement share or total watch time metrics that industry data confirms as the primary currency of streaming market competition, with viewing hours now accounting for nearly half of all TV consumption globally.

A mandatory notification and heightened scrutiny could be triggered if a combined entity controls a specific proportion of Intellectual Property accounting for total OTT viewing hours in a market. This will mark a shift in regulatory focus from ‘share of wallet’ (financial aspect of the market, specifically, subscription revenue) to ‘share of mind’ (time spent). To illustrate: if the CCI sets the Cultural Threshold at 30% of total OTT viewing hours in a defined segment, the merged Netflix–WBD entity, combining Netflix's existing dominance with HBO, DC, and Harry Potter catalogues, would comfortably exceed this on available industry data, triggering mandatory notification and heightened scrutiny. This directly addresses the contrast of ‘Share of Wallet’ with ‘Share of Mind’.

THE SUNK COST TRAP FOR THE INDIAN CONSUMER

The economic and legal analysis of the merger may extend beyond the firm to the consumer experience. The merger exploits behavioural economics to lock in consumers, fundamentally altering the nature of meaningful choice. Behavioural economics suggests that consumers often escalate their commitment to a service to rationalise the sunk costs (time and data) they have accumulated.

Users invest significant time training recommendation engines. This creates a cognitive trap, leaving Netflix for a rival means losing a personalised digital history (watch lists, ratings). As switching costs rise, the platform can implement price hikes because the consumer has become price inelastic. Further, when a user spends years teaching Netflix their taste, the cost of switching is not just the monthly fee, but the labour of re-training a new algorithm from scratch. This digital labour is a hidden switching cost that benefits the incumbent.

The merger's competitive harm extends beyond antitrust law to consumer protection. Under the Consumer Protection Act, 2019, Section 2(47) defines unfair trade practices to include deceptive practices impeding free and informed consumer choice. Section 2(47)(ix) specifically governs unauthorised use of personal consumer information, directly applicable to Netflix's algorithmic data lock-in, where accumulated viewing history creates artificial switching costs that trap consumers on the platform. This consumer protection dimension reinforces the broader 'Share of Mind' argument: a platform commanding both premium cultural content and irreplaceable personal data holds structural dominance that transcends traditional revenue-based metrics.

STRENGTHENED DUOPOLY

The proposed Netflix-WBD merger will significantly accelerate the consolidation of India's OTT market toward a duopoly, with serious implications for competitive diversity and consumer choice. The Indian market is consolidating into a duopoly similar to the telecom sector. JioStar dominates live sports (particularly Cricket/IPL) and mass‑market regional content, while Netflix–WBD will command premium global fiction and high‑value prestige Intellectual Property.

 This emerging structure creates an illusion of choice, mirroring telecom, where high barriers to entry and parallel pricing strategies restrict consumer sovereignty. In a duopoly, a firm might have low direct revenue in India but command 40% of all premium fiction viewing hours, giving it massive leverage over the cultural discourse and future competition.

PROPOSED REGULATORY REMEDIES

A key remedy is to mandate Fair, Reasonable, and Non-Discriminatory (FRAND) licensing for heritage content. While traditionally applied to Standard Essential Patents in telecommunications, the authors propose a novel application of this framework to the entertainment industry. Heritage content may be defined as assets older than ten years or those meeting a cultural engagement threshold. By treating such cultural legacies as Essential Facilities, a doctrine holding that a dominant firm cannot deny access to inputs essential for competition, regulators can ensure that rival platforms remain viable by offering must-have content.

Just as a phone cannot function without a cellular tech, a streaming platform cannot remain competitive without heritage content. This prevents foreclosure of cultural infrastructure and sustains diversity in the streaming ecosystem

Another remedy is to require data portability and interoperability. Regulators should mandate a standardised Application Programming Interface (API) that allows users to export their viewing history and ratings to rival platforms. This portability eliminates the sunk cost trap, where users feel locked into a single platform due to accumulated digital memory.

 

CONCLUSION

The proposed Netflix–WBD acquisition is ultimately a stress test for competition law in the attention economy. Traditional merger control was built for markets where harm is financial and measurable. The streaming industry operates differently; its scarce resource is not capital but cultural memory, and its dominant currency is not money but time.

This piece has argued that India's existing framework, even as strengthened by the Competition (Amendment) Act, 2023, lacks the vocabulary to assess this harm. The Cultural Threshold, FRAND licensing for heritage content, and mandatory data portability represent a first set of responses. Questions this piece could not fully explore include the interaction between the Cultural Threshold and the Digital Personal Data Protection Act, 2023, and whether 'share of mind' metrics can be operationalised with sufficient precision to withstand challenge before the CCI. These remain important avenues for future scholarship.

What is clear is that if competition law continues to treat cultural infrastructure as equivalent to commodity markets, this merger will pass unchallenged and India's streaming ecosystem will be permanently reshaped by a consolidation the law never saw coming.