• by Wayne Friedman , 7 hours ago

The proposed 100% tariff by President Trump on U.S. movies made outside the U.S. was short on details, analysts say, but on face value it could have serious and dramatic negative effects on the business -- especially streaming platforms.

“100% tariffs on some or all of the cost of a film (or a TV show?) would lead to fewer films, more expensive films, and lower earnings for all in the business,” says Ben Swinburne, managing director and media analyst at Morgan Stanley.

One immediate negative result, Swinburne said, could be the the selling of U.S. streaming platforms into international markets .

“This is perhaps the biggest risk, raising the potential for U.S. streaming services to be taxed at materially higher rates or even reducing the reach of Hollywood content,” he says.

For Netflix or any U.S. film studio, he says, the majority of their revenues come from outside the U.S.

Analysts say that premium streaming platforms -- especially those owned by legacy TV-movie media companies -- could be in for harder times, especially considering that many are only barely profitable, if at all.

The biggest issue will be determining which part of a film that is produced overseas could be taxed.

“The reality is that for any given film, there can be writing, production, editing, post-production, visual effects -- all done in different countries,” says Swinburne.

Compared to other U.S.-made consumer products that have a negative trade deficit versus similar products made in international markets, U.S. film and TV business is a net export business, running a trade surplus.

Other questions from Swinburne included: “Which part of the value chain will pay the tariff? If the studios/streamers pay the tariff, will that higher cost simply lower margins? To what degree can they pass that on to distributors (third party streamers, TV networks) or consumers (higher cable bills, movie tickets)?”

Major TV-movie media companies closed down with stock declines on Monday on the news. Netflix dropped 2% to $1,134, while Disney was down 0.4% to $92.11, Warner Bros. Discovery lost 2% to $8.37, Paramount Global declined 1.6% to $11.25, Fox Corp. was down 0.8% to $45.82 and Roku lost 1.8% to $60.42.