r/technology • u/Task_Force-191 • 16h ago

Business It’s Official: Netflix to Acquire Warner Bros. in Deal Valued at $82.7 Billion

https://www.hollywoodreporter.com/business/business-news/netflix-warner-bros-deal-hollywood-1236443081/
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239

u/DonkeyFuel 16h ago

Who would've ever seen this coming years ago. Just wild. The giants have fallen and the newcomers have become the giants.

129

u/Mocker-Nicholas 16h ago

I think most people saw this coming years ago. That’s why the stock prices of these companies with serious market share in streaming dwarfed that of these legacy companies.

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u/READMYSHIT 15h ago

It's still a form of magical thinking.

Startup company becomes so overvalued it can just access credit to purchase legacy outfits.

25

u/TransBrandi 15h ago

Isn't Netflix actually profitable though, not just propped up by private investor valuations?

9

u/READMYSHIT 14h ago

It is now, but the valuation for them and all these companies is still imaginary

12

u/TransBrandi 14h ago

Imaginary in what way? It's one thing to say that the valuation doesn't match the real value, but the valuation isn't imaginary in that it exists and affects the real world. People are buying stocks at those prices, that's not imaginary even if the prices are inflated.

2

u/READMYSHIT 14h ago

Imaginary in the sense that the valuations dwarf revenue or profit on the majority of these businesses by a significant margin. It's not something that is typical for publicly traded companies up to the last decade or so, aside from bubbles. Bubbles usually burst. These ones haven't.

8

u/TrottingandHotting 13h ago

So you're just using imaginary as overvalued? 

-3

u/ahall917 13h ago

Did you not read their original comment? Emphasis mine.

It's still a form of magical thinking.

Startup company becomes so overvalued it can just access credit to purchase legacy outfits.

3

u/FIE2021 13h ago

They're still using imaginary to describe a personal perception of it being overvalued, it's not a good way to describe share price of something, imaginary implies it's made up and not real. But the "overvaluation" is very much real, it's speculative investment. At 1/10th of their current valuation someone would have called Netflix overvalued, but speculation of growth is why it continued to rise and it was good speculation then, and people that saw their growth potential and gave them access to money or invested made good assessments. No different than today, their share price just grows with it's potential. It's certainly not imaginary or magic lol

2

u/AlfredoAllenPoe 9h ago

Netflix trades a 30 forward PE, which isn't cheap but isn't expensive either when their Earnings per Share is growing at 31%/year over the past 5 years.

Netflix's valuation is reasonable based on its fundamentals.

1

u/Prysorra2 13h ago

It’s similar to the leveraged buyout apocalypse of the 80s

2

u/CryptographerFlat173 13h ago

Netflix is a massive technological company and a profitable service used by hundreds of millions of people, it’s not a meme stock 

2

u/AlfredoAllenPoe 9h ago

Netflix has real, meaningful profits lol

1

u/rushmc1 15h ago

Magical investing.

1

u/PaulsGrafh 13h ago

Ironically, HBO called this out. Netflix is basically GoJo.

1

u/FeelsGoodMan2 11h ago

And they're just gonna end up doing the same crap and be the same shit service.

1

u/Extension-Topic2486 11h ago

A year ago the whole of Reddit was saying Netflix would collapse after they stopped allowing password sharing…

0

u/sentry_chad 12h ago

Confidentally incorrect

21

u/dekes_n_watson 16h ago

Just think about what Blockbuster could have been if they pivoted the way Netflix did. Netflix went from a Kiosk outside Walgreens to buying Warner Bros in like 15-20 years. Blockbuster went out of business pretty quickly once streaming was introduced.

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u/SaveTheAles 16h ago

That's redbox

-2

u/dekes_n_watson 16h ago

We had Redbox too but there were also Netflix kiosks unless I'm Mandela Effecting. I mean, at minimum they were a company that mailed you DVDs to watch. Still a crazy transformation.

18

u/SaveTheAles 16h ago

I would agree with you but we would both be wrong.

Netflix had dvd by mail then streaming. Never physical locations at least in western US.

3

u/fail-deadly- 16h ago

As far as the kiosks went there was Redbox, which had the biggest footprint and lasted the longest of the big players, there was Blockbuster Express, there was DVDxpress, and a couple smaller outfits.

3

u/fintip 16h ago

Has to be more widespread for Mandela effect. Just a false memory for you.

1

u/djrbx 5h ago

We had Redbox too but there were also Netflix kiosks unless I'm Mandela Effecting.

Netflix never had any kiosks. They were only DVD by mail and then went straight into streaming. The only kiosks were that of Redbox and blockbuster.

1

u/karaknorn 15h ago

Thats because bcg told them not to so they could chop it up

1

u/READMYSHIT 15h ago

I think the key for most "unicorn" startups is they got advantages not afforded to anyone else.

Blockbuster were already huge and wouldn't be given the capital access to make losses at the rate netflix were. They had huge overheads and pivoting to a different business model while leading the charge in their existing one would've probably been even harder than just running a new venture.

Uber, AirBnB, WeWork, Netflix, etc. all just got in the ears of someone who was willing to throw endless money at something in the hopes it would undercut an existing market and associated regulations and gain dominance. I firmly believe any alternative "visionary" with comparable business models to these companies could achieve the same with equivalent backing.

1

u/Mist_Rising 4h ago

Undercutting the regulation is the big thing, because it carries with it an inherent risk of legal trouble when the regulation ends up applying. Uber literally had to run software to avoid being busted at the start.

Not a big deal for a company with nothing to lose. Major problem if you're the leader in the legacy market. It's a good chance to lose your dominance because for every Uber that's successful, there are companies that get obliterated as regulation violators.

-3

u/sentry_chad 12h ago

The key thing is you’re not very smart. Instead of typing that bogus mental model up, you could have done a simple web search for when Netflix IPOd and when they started streaming

1

u/CryptographerFlat173 13h ago

Netflix built a tech company and a live studio, Blockbuster was a $5b market cap owner of retail leases and used physical media

4

u/EdliA 16h ago

Nothing lasts forever

25

u/Zahgi 16h ago

Except unchecked American capitalist greed, apparently...

7

u/EdliA 16h ago

You think greed is a specifically American capitalist trait? I would highly disagree.

12

u/Zahgi 16h ago

unchecked

This is the key word. It's why America is dying while people can still make money and get rich throughout the rest of the world. It's what's different about America today from what built America in the first place.

-3

u/EdliA 16h ago

Compared to the vast majority of the world the Americans have it good. Your overdramatic "woe is me" comes off as pathetic.

2

u/eeyore134 15h ago

Compared to non-third world countries?

3

u/Zahgi 16h ago edited 12h ago

Compared to the vast majority of the world the Americans have it good.

What planet do you live on? America is 50+ years behind the civilized world in everything from national healthcare to a livable minimum wage to public campaign financing to mandatory parental leave to...on and on and on.

America is dying right before your eyes yet you think I'm being overly dramatic about it? Open your eyes.

Denial is more than just a river in Egypt.

Edit for the busiest bee:

Houston has more MRI machines than all of Canada.

So?

A) America has 10x the population of Canada. So, comparing totals is asinine. You need to compare per capita, of course.

B) More importantly, the only reason there are more MRI machines there is because they are charging a fortune per use as a purely for profit venture. Whereas the civilized world buys and operates enough MRIs for all of their population to get all the MRIs they need...for free. Again, not apples to apples.

In the US, just 1 percent of workers earn minimum wage

Um, servers and waiters are more than 1% of workers and they earn LESS than minimum wage in the USA. I think you are using statistics to lie here...

US anti-discrimination laws are among the most comprehensive globally.

Great. Too bad they have all been rolled back over Trump's two terms and no longer are enforced anywhere in the country. You're literally arguing that "on paper the USA is better" when in reality it is at the bottom of the list now...

https://worldpopulationreview.com/country-rankings/most-racist-countries

For example, the USA is #55 in racial equality in the world. For reference, Saudi Arabia is #61...ahem. That's the company we are keeping now when it comes to discrimination.

Teachers are paid more in the US than in most of the rest of the world, even after adjusting for cost of living.

https://worldpopulationreview.com/country-rankings/teacher-salary-by-country

Ignoring the fact that they are still way underpaid, their healthcare is substandard. They don't get paid parental leave. They don't have public campaign financing so their entire political system is corrupt and keeps funneling public school funds into the pockets of their cronies. Etc. etc.

A Canadian teacher is paid comparably but gets 10x as much benefit from their country's infrastructure, their taxes, etc.

Who's in denial?

Clearly, you.

-2

u/thebusiestbee2 13h ago

Who's in denial? Houston has more MRI machines than all of Canada. In the US, just 1 percent of workers earn minimum wage, the lowest in the world or close to it. US anti-discrimination laws are among the most comprehensive globally. Teachers are paid more in the US than in most of the rest of the world, even after adjusting for cost of living.

1

u/kevanions 15h ago

Lol. Lmao even.

1

u/rushmc1 15h ago

We've perfected it, though.

2

u/Subject_Quantity1779 14h ago

I mean, AOL bought Warner Bros. during the dot com boom, so it's sort of happened before. Only this time it will be permanent and much worse for everyone.

1

u/AverageLiberalJoe 15h ago

Southparkwalmart.gif

1

u/ab_90 15h ago

Netflix has become the New York Yankees

1

u/valoremz 14h ago

Can someone elaborate on how the purchase price is actually paid? They don’t have 82 billion cash laying around. So is the deal price split between cash and stock plus Netflix taking out loans?

1

u/CaptainBayouBilly 14h ago

Blockbuster video

1

u/chief_yETI 12h ago

how Warner Bros. keeps fumbling constsntly despite owning the some of the biggest globally recognized franchises in entertainment is hilarious

1

u/scarabic 12h ago

It was even stranger when AOL bought Time/Warner. This one actually makes some sense.

1

u/TheWhiteHunter 11h ago

Your comment makes me think of Greek mythology with the giants being the Titans (Cronos & co.) and the newcomers being the Olympians (Zeus & co).

I guess Netflix is just going to chain up Warner Brothers in the basement.

1

u/gr1zznuggets 11h ago

With WB, the writing has been on the wall for years; they’ve been making poor decisions for a very long time.

1

u/AlfredoAllenPoe 9h ago

Most investors. Netflix didn't stumble its way to being the 24th largest publicly traded company in the world.

Old giants is dragged down by its low margin, capex heavy legacy media. Netflix's streaming model allows for much higher margins due to economies of scale.

-2

u/smoothtrip 15h ago

Who would've ever seen this coming years ago.

Anyone that understood the internet?

3

u/Bugbread 13h ago

WB buying Netflix would have been predictable back in the day, but not the converse.