On December 5th, Netflix announced it’d officially acquired the rights to Warner Bros. Discovery in a deal worth $82.7 billion. The deal will see the streaming giant take over Warner Bros. film and TV studios, the Warner Bros. Discovery streaming division, and all of the HBO and HBO Max properties. While the deal isn’t expected to close until 2026 at the earliest, it could still face governmental and regulatory scrutiny.
Who Gets What?
For their part of the deal, Netflix is coming off as the overwhelming winner here. Not only will they no longer have to license some of HBO’s most popular franchises, but they’ll flat-out own them. This means they now DIRECTLY control the content itself, and this gives them incredible leverage over the actors and studios that create the movies and shows we love. They’ll also gain massive IP rights (Harry Potter, Game of Thrones, Insecure, Batman, Superman), and will almost certainly lay off a good chunk of their employees as they downsize and restructure divisions.
On the flip side, the cable and non-studio division of Discovery Global will remain intact. This means CNN, TBS/TNT, Discovery Channel, HGN, Food Network etc. will remain outside of Netflix, and will most likely continue to be licensed to other streaming and cable services.
The Consumer Impact
This is the bad news part of the deal. This will definitely negatively impact consumers. On one hand, there will be one less streaming service available to choose from (which actually don’t sound too bad…), but on the other, this means more price hikes are inbound. With Netflix gaining access to a vast array of content, including numerous projects, actors, and franchises, the cost of absorbing Warner Bros. Discovery will likely be passed down to subscribers.
With less competition and more exclusivity rights, Netflix will also directly be responsible for other services increasing their prices. Either by way of being forced to pay more to license certain movies and shows, or being forced into mergers themselves in order to better compete, things will probably get worse before they get better.
In The End…
There’s a slight chance that all this gloom and doom is misplaced. The deal isn’t expected to be completed until sometime in 2026, and before it does, it will have to stand up against antitrust and regulatory challenges. Each company has also agreed to a pretty hefty “breakup clause” if the deal doesn’t go through for some reason.
For their part, Netflix would have to pay Warner Bros. Discovery roughly $5.8 billion if it decides to walk away or if the deal gets vetoed by regulators. Adversely, Warner Bros. Discovery would have to pay Netflix $2.8 billion if it decides to sell to another buyer.
We have a while to wait before we find out if this deal will close or not, but one thing is for certain — Netflix is primed to become the largest global content distributor in history by any means necessary. If the deal closes, consumers will once again, figuratively and literally, pay the ultimate price.
