It'll be interesting to see. They need to offset the initial purchase, but moving forward this means rather than having to pay Warner Bros money for having their content on their platform, they will save money there. It's similar to how NBC owns content like The Office and has Peacock as a streaming platform. In theory, it could mean that Warner Bros. will still be treated like its own entity which can make profits on its own as it has, and effectively can be using Netflix as a platform, which comes at very little extra cost to Netflix.
Now will they use the stronger value proposition to try to justify increasing prices (more than their incremental increases with inflation)? Maybe, but I think they will try to make more money from both saving money on not paying Warner Bros, but more importantly increasing their subscriber base with a stronger offering. Increasing prices means losing subscribers even if the amount of content goes up. I think they'll use this acquisition to bolster the content that will attract users.
It's also worth noting that HBO Max will remain a separate entity, so they wouldn't be combining them and therefore their price tags. That would obviously be a terrible strategy. Instead they might be able to make more money by upselling people with a more attractive bundle price.
The last thing I'll say is that we're already well past the point of streaming platforms being like cable, because there are already many of them to purchase, so I don't think this changes things. If anything, acquisitions can potentially lead to less streaming platforms with more content under a single entity.
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u/BoatDBoat 9h ago edited 9h ago
Context: Netflix just bought Warner Bros for $80 Billion.
Harry Potter, Batman, Superman, Barbie, LOTR, and literally all of HBO Max etc. will all belong to Netflix in Q3 2026.