Netflix took its next step towards becoming one of the most dominant forces in the global entertainment industry on Friday by announcing its acquisition of Warner Bros, HBO and its streaming business HBO Max. The $82.7 billion deal will see the entertainment giant acquire the studio and streaming arm of Warner Bros. Discovery, following the latter company's earlier announcement this year that it's splitting in two. WBD is expected to spin off its Discovery business in the third quarter of 2026.
By acquiring Warner Bros., HBO and HBO Max, Netflix not only will boost its own catalog of shows and films -- which already includes big hitters such as Stranger Things, Wednesday and Squid Game, with Warner Bros. properties Harry Potter, Friends and Batman -- but will also see it play host to HBO shows including Game of Thrones and Succession.
"Our mission has always been to entertain the world," said Netflix co-CEO Ted Sarandos in a statement. He promised the deal would bring audiences "more of what they love and help define the next century of storytelling."
Greg Peters, co-CEO of Netflix, praised WBD's longevity and executive team, adding, "With our global reach and proven business model, we can introduce a broader audience to the worlds they create -- giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders."
The big question for most Netflix subscribers will likely be how the acquisition might affect monthly subscription costs. Netflix is our top pick of the many streaming services you have available to you, but one of the few downsides we note in our review is that the premium plans are already on the pricey end of the spectrum.
It's too early to say what the knock-on impact on pricing might look like, but streaming services are getting increasingly expensive, and this acquisition is unlikely to reverse that trend. While it's unclear whether Netflix plans to merge both streaming apps into a single offering, the company said that the agreement will enable it to "optimize its plans for consumers, enhancing viewing options and expanding access to content."
The deal, which values Warner Bros. Discovery at around $72B after debt, was unanimously approved by the boards of both companies. It's expected to allow Netflix to grow its production capacity for original titles and invest in more original content. Netflix said that it expects to maintain Warner Bros.' current operations, and still expects theatrical releases for films (like The Batman Part II) to be business as usual.
What's next if the transaction clears any regulatory hurdles? "If this deal makes it through regulatory approval, Netflix will cement itself as the Goliath of streaming services now with the combined weight of HBO Max and the content studios behind it all," said Forrester VP, research director, Mike Proulx. "This deal changes the calculus of the streaming wars, representing a seismic shift in the entertainment industry."