What $82.7 Billion Won’t Buy: Magic and Romance

What might be lost in Hollywood’s largest-ever transaction between Netflix and Warner Bros. Discovery is the very thing that helps people fall in love with brands

Whether they sell movies, phones, candy or cars, companies also sell magic and romance.

Customers pick “their” car out of dozens, “their” beer out of hundreds. And their decision isn’t based purely on features and benefits. Or taste. It’s based on magic and romance. How the thing makes them feel is more important than how the thing actually performs.

Brand managers and marketers have known this basic principle for decades. Heck, it anchors the entire advertising industry.

As corporate consolidation has accelerated, companies that make stuff have become line items in increasingly larger companies that own companies that make stuff.

On the one hand, this is how things go. Competition and capitalism make scale an eventuality.

On the other, as companies get larger and more stratified, they add distance and layers between themselves and their customer. And distance is a killer. It dulls the magic and the romance that form the intangible connection people feel with brands, and replaces them with sterility and “bigness.” There is no longer a personal feeling when consumers make purchasing decisions. 

“Customer decisions are based on magic and romance. How the thing makes them feel is more important than how the thing actually performs.”

While this is the natural course dictated by scale, it’s not inevitable.

Sure, it’s much harder for a trillion-dollar company that owns dozens of brands to feel quaint and personal to its customers than it is for a mom-and-pop shop, but it’s not impossible. (Take, Taco Bell or the iPhone, for example!)

Creating that quaintness, that personal connection, should be part of its core mission. Because that’s what makes up the company’s ultimate reputation.

Which brings us to Netflix and its bid to buy Warner Bros. Discovery for a kingly sum of $82.7 billion, combining the first and fourth largest streaming platforms into a singular content juggernaut.

The bid from Netflix has been part of a dramatic duel with Paramount Skydance to outbid and outmaneuver each other for the title of the world’s most dominant entertainment conglomerate.

Reaching such scale is an astonishing achievement. It will allow Netflix to offer endless entertainment choices for customers, more than any other source in the world. That should feel like a win for customers in an environment where the appetite for content only continues to grow. Not bad for a company that started out delivering DVDs by mail just a quarter century ago.

Yet the narrative around Netflix’s planned acquisition hasn’t really been about a win for customers. It has been driven by size, scale and most visibly, by dollars. Lots and lots and lots of dollars. It has become a narrative like most other corporate narratives: the pursuit of endless power and wealth and supremacy.

In such a narrative, a substantial reputational risk arises for the buyer. The customer feels further and further from the product they are spending their money to buy, and along with it, they are feeling more and more resentment for the company they are buying it from.

Such risk should not be ignored. It builds and calcifies over time. Every future transaction, every price hike, every major decision… they all become signals that reinforce the customer’s resentment of “bigness.” That the brand I am purchasing from doesn’t care about me. Until one day when their trust is all gone, and the buyer’s reputation with its core stakeholders (their customer!) has evaporated.

There is an important lesson here for company leaders and brand managers. Operating their businesses will likely require lots and lots of decisions that potentially create more distance between them and their customers. Whatever their size, whatever their product, they should aim to shrink the distance between their organizations and their customers with each decision they make. 

They should prioritize the magic and romance in their businesses. Even while they scale. Ultimately, those two ingredients fuel the connection people feel with the things they choose to buy and the brands they choose to believe in.