<\/p>\n
Netflix and Warner Bros. Discovery have reached a deal that will change the entertainment industry as we know it.<\/p>\n
On Friday, Dec. 5, Netflix announced its purchase of Warner Bros., including its film and TV studios, HBO Max, and HBO. According to the companies, the total enterprise value of the deal is $82.7 billion, with an equity value of $72 billion. <\/p>\n
The announcement comes after a weeks-long bidding war in which Paramount Skydance and Comcast also vied to obtain the entertainment conglomerate. Netflix won the day, to the surprise of many. <\/p>\n
\u201cI know some of you are surprised we are making this acquisition,\u201d Netflix co-CEO Ted Sarandos said during a Friday call with analysts, per Variety<\/a>. <\/p>\n In a statement, Sarandos said that Netflix\u2019s mission \u201chas always been to entertain the world.\u201d He noted that \u201ccombining Warner Bros. incredible library of shows and movies\u201d with Netflix\u2019s \u201cculture-defining titles\u201d will \u201cgive audiences more of what they love and help define the next century of storytelling.\u201d<\/p>\n The deal, which is expected to close in the next 12-18 months, consists of both cash and stock and is valued at $27.75 per share of Warner Bros. <\/p>\n Warner Bros. was founded in 1923. Its library includes the DC universe, the \u201cHarry Potter\u201d film series<\/a>, the \u201cLord of the Rings\u201d movie franchise, and iconic films including \u201cCasablanca\u201d and \u201cCitizen Kane.\u201d Netflix began as a by-mail movie rental service in 1997 before launching its streaming platform in 2007.<\/p>\n Keep scrolling for the answers to all your burning questions about how Netflix\u2019s acquisition of Warner Bros. will impact viewers and subscribers. <\/p>\n It\u2019s still a bit unclear what will happen to HBO and its streaming platform, HBO Max. According to Variety<\/a>, Netflix suggested that it will keep HBO Max as a distinct platform. However, the HBO library will also live on Netflix once the deal goes through.<\/p>\n \u201cBeloved franchises, shows and movies such as \u2018The Big Bang Theory,\u2019<\/a> \u2018The Sopranos,\u2019 \u2018Game of Thrones,\u2019 \u2018The Wizard of Oz\u2019 and the DC Universe will join Netflix\u2019s extensive portfolio including \u2018Wednesday,\u2019 \u2018Money Heist,\u2019 \u2018Bridgerton,\u2019 <\/a>\u2018Adolescence\u2019 and \u2018Extraction,\u2019 creating an extraordinary entertainment offering for audiences worldwide,\u201d the companies said in a statement.<\/p>\n READ MORE: <\/b>HBO just renewed 4 popular shows \u2014 see what\u2019s coming back<\/b><\/a><\/p>\n It seems that Netflix\u2019s acquisition of HBO will be similar to Disney\u2019s purchase of Hulu. For now, Hulu is still a standalone app, although its content library is also available on Disney+ and Hulu<\/a>. <\/p>\n In a press release<\/a>, Netflix said it expects $2-3 billion of annual cost savings by the third year after the deal closes. Shareholders will get a piece of that, but will the cost savings be passed down to subscribers? <\/p>\n According to Reuters<\/a>, Netflix argued during negotiations that combining its content library with HBO Max would benefit subscribers by lowering the cost of a bundled streaming platform. <\/p>\n Netflix has not yet shared if and how the deal with Warner Bros. will impact subscription prices. If it follows in Disney+\u2019s footsteps, consumers will still be able to purchase standalone Netflix and HBO Max subscriptions, or pay more for a bundle that includes both<\/a>.<\/p>\n READ MORE: <\/b>HBO finally reveals \u2018Euphoria\u2019 season 3 premiere date, time jump details<\/b><\/a><\/p>\n Some consumers have concerns about how Netflix\u2019s purchase of Warner Bros. will impact the movie theater business. In a press release, Netflix said it \u201cexpects to maintain Warner Bros.\u2019 current operations and build on its strengths, including theatrical releases for films.\u201d<\/p>\n During a Friday call with Wall Street analysts, Sarandos pointed out that Netflix has had several theatrical releases this year. <\/p>\n \u201cIt\u2019s not like we have this opposition to movies in theaters,\u201d the Netflix co-CEO said, per Deadline<\/a>. \u201cMy pushback has been mostly in the fact of the long, exclusive windows, which we don\u2019t really think are that consumer friendly.\u201d<\/p>\n Sarandos\u2019 comments suggest that we\u2019ll see more instances of films debuting in theaters but becoming available on Netflix shortly thereafter. <\/p>\n Prominent voices in the entertainment industry, including Cinema United President and CEO Michael O\u2019Leary, have expressed concerns about the deal. <\/p>\n \u201cThe proposed acquisition of Warner Bros. by Netflix poses an unprecedented threat to the global exhibition business. The negative impact of this acquisition will impact theatres from the biggest circuits to one-screen independents in small towns in the United States and around the world,\u201d O\u2019Leary said in a statement<\/a>. <\/p>\n \u201cCinema United stands ready to support industry changes that lead to increased movie production and give consumers more opportunities to enjoy a day at the local theatre. But Netflix\u2019s stated business model does not support theatrical exhibition. In fact, it is the opposite. Regulators must look closely at the specifics of this proposed transaction and understand the negative impact it will have on consumers, exhibition and the entertainment industry,\u201d he continued. <\/p>\n READ MORE: <\/b>\u2018Stranger Things\u2019 is heading to theaters: What to know<\/b><\/a><\/p>\n An anonymous group identifying themselves only as \u201cconcerned feature film producers\u201d sent an email to congress on Friday, outlining their fears that the proposed deal means Netflix could \u201ceffectively hold a noose around the theatrical marketplace\u201d by reducing the amount of time that Warner Bros. movies spend in theaters before hittng Netflix. <\/p>\n Sarandos attempted to quell such fears on Friday, noting that he \u201cwouldn\u2019t look at this as a change in approach for Netflix movies or Warner movies,\u201d per Deadline<\/a>.<\/p>\n \u201cI think over time the [theatrical release] windows will evolve to be much more consumer friendly \u2026 but I\u2019d say that right now you should count on everything that has planned on going to the theaters through Warner Bros. will continue to go to the theaters through Warner Bros,” Sarandos said.<\/p>\n Netflix\u2019s acquisition of Warner Bros. still needs government approval before it becomes official. It could face opposition over antitrust concerns, but economist Cristina Caffarra, who has experience advising companies like Amazon on antitrust issues, doesn\u2019t think the deal will be blocked. <\/p>\n \u201cThe [European Union] never stops these deals. They always do access remedies,\u201d Caffarra told Deadline<\/a>. \u201cI\u2019m not saying it will sail through, [but the process will be] saber rattling, remedy, clear.\u201d<\/p>\nWhat will happen to HBO and HBO Max?<\/h2>\n
Will Netflix prices go up?<\/h2>\n
Will Warner Bros. movies still be in theaters?<\/h2>\n
What are critics of the Netflix Warner Bros. deal saying?<\/h2>\n
Will the Netflix deal with Warner Bros. even go through?<\/h2>\n