Semafor's Ben Smith on the Warner-Netflix deal, AI's political backlash, and how trust became media's core problem

Summary

The Warner Bros. Discovery-Netflix Deal

Netflix's bid for Warner Bros. Discovery surprised nearly every media observer, including Ben Smith of Semafor, who assumed the company would never seriously pursue an asset laden with challenging cable businesses alongside the studio. The prevailing expectation had been that David Zaslav would spin out the cable assets, sell the studio separately, and that David Ellison's Skydance would walk away with the prize largely unopposed. Ellison's willingness to take the whole company, cable baggage included, was seen as the move of a non-economic actor, a characterisation Smith applies directly: Ellison is fundamentally a person who wants to own a movie studio, and bidding against that motivation is structurally difficult, much like competing for a sports franchise.

The financial destruction under Zaslav's stewardship is striking. The Discovery-WarnerMedia merger, framed at the time as a cable conglomerate acquiring a Hollywood gem, saw the combined company's stock collapse to roughly $7 to $8. The current bidding war, whatever its outcome, has partially reconstituted value that the merger itself obliterated.

The cable news assets, particularly CNN and CBS News, are peripheral to the core logic of the deal but politically central. Trump's primary interest in the transaction is favourable coverage, and the Ellison family's reported concern about CBS News coverage of Israel has already softened some editorial positioning. Smith is direct: no matter how accommodating a news organisation becomes toward Trump, it will never be accommodating enough, making CBS News what one media figure described as 5% of revenue and 80% of the headaches.

Netflix's Strategic Rationale

The case for Netflix acquiring Warner rests on catalogue depth that cannot be manufactured quickly. HBO's library, which includes Harry Potter, Lord of the Rings, and decades of prestige television, represents cultural infrastructure built over fifty years. Netflix already spends hundreds of millions of dollars licensing Warner content, so vertical integration carries real financial logic beyond trophy hunting.

The consumer consolidation argument is also genuine. The current streaming landscape, where subscribers routinely forget they are paying for MGM Plus or a third or fourth service, is broadly viewed as untenable. However, Smith is sceptical that merging the number one and number two streamers is the obvious solution to consumer fragmentation. The more pressing concern for Hollywood insiders is monopsony risk: with fewer buyers for content, actors, writers, and producers become price takers.

Apple and Big Tech in Hollywood

Apple's brand constraints fundamentally limit its ability to compete for cultural impact. No Apple TV production will show an iPhone being damaged or destroyed, and the company's aversion to anything divisive or risky filters out the type of content that historically cuts through, the programming associated with HBO. Smith's observation is blunt: good art is divisive, and Apple's production culture works against that. Amazon faces a similar challenge in not having built the creative culture that produces high-impact work at scale.

AI's Coming Political Backlash

The most significant forward-looking signal in the conversation is Smith's account of active Republican political positioning against AI. A GOP consultant is currently shopping for a candidate to run an explicitly anti-AI platform, targeting J.D. Vance as the frontrunner most vulnerable to the attack that he is a tool of the tech industry. The argument being constructed is that AI will destroy jobs, harm children, and impose data centre infrastructure on communities, none of which the Trump administration has bothered to explain or sell to voters.

Smith argues the political exposure is structurally significant. Trump adopted a maximally pro-AI posture on day one, with David Sacks securing that commitment alongside Sam Altman and Elon Musk, but the administration has never campaigned on AI or built public consent for it. The result, Smith believes, is a setup for a significant midterm backlash.

The backlash dynamic differs from social media's trajectory. Social media delivered roughly a decade of broadly positive consumer experience before the political and cultural reckoning arrived. AI attracted hostility almost immediately, compounded by the fact that leading AI executives, most notably Sam Altman, built their public profiles partly by warning that their own technology could be catastrophic. Smith credits this as an extraordinary marketing feat that also created a credibility problem the industry now cannot escape.

Media Trust and Semafor's Model

The structural problem Smith identifies across media is not bias per se but the erosion of the boundary between reported fact and journalist opinion. Semafor's editorial approach responds directly to this: stories are broken into discrete components, with facts separated from the journalist's stated perspective, followed by alternative viewpoints. The goal is to be transparent about analysis rather than embedding it into news framing, which Smith argues consumers increasingly reject regardless of political alignment.

On the broader media landscape, Smith expects consolidation to continue pulling independent creators back toward larger structures, driven by the mundane economics of ad sales, subscription infrastructure, and cross-promotion rather than any editorial logic. Fox is already aggregating right-leaning podcasts; MSNBC is moving toward a similar left-leaning rollup. The format is converging on television regardless of what the distribution mechanism is called, and production value expectations are rising in step.