Major Changes Could Soon Impact HBO Max and Netflix Users: Here's Why

Netflix and Warner Bros. Discovery (WBD) have officially reached a final agreement that will allow Netflix to acquire HBO, HBO Max, and Warner Bros. film and television studios, with the deal valued at $82.7 billion. This monumental acquisition could dramatically alter the streaming market within the next year or two.

The transaction is expected to close 12 to 18 months after WBD completes its planned separation of the Global Networks division in 2026. Rumors had circulated for months about WBD selling to the highest bidder, with Netflix, Paramount, and Comcast all mentioned as potential buyers.

Under the terms of the cash-and-stock deal, Netflix will continue operating WBD's existing businesses while gaining access to its extensive content library. This includes major franchises such as Harry Potter, the DC Universe, Lord of the Rings, Monsterverse, and over a century of film and television content.

Sources close to the negotiations suggested that Netflix is exploring the possibility of combining HBO Max with its own service. While no official announcement has been made regarding a joint subscription, a bundled offering could increase the value of Netflix's premium plan, reducing costs for users and providing access to a broader library.

However, the deal has not been without controversy. Paramount criticized WBD's board for allegedly favoring Netflix's proposal and failing to form an unbiased evaluation committee. The board had previously rejected a $60 billion bid from Paramount in October.

Approval of the acquisition would give Netflix control over one of the most influential entertainment libraries in the world, which has raised concerns among some observers regarding content management and market dominance. Analysts note that other potential buyers, like Paramount or Comcast, would likely have used HBO Max similarly to strengthen their streaming portfolios.

The merger will also face regulatory scrutiny. Lawmakers have expressed concern that the consolidation could grant Netflix excessive market power. Reports indicate that certain government officials have questioned aspects of Netflix's content strategy, which may require adjustments for regulatory approval.

Until the acquisition is finalized, Netflix and HBO Max will continue to operate as separate platforms. If approved, subscribers could gain access to Warner Bros.' full catalog, including HBO shows, classic films, and blockbuster franchises. Netflix projects that the deal will boost earnings per share by the second year and generate $23 billion in annual cost savings by the third year post-acquisition.

Author: Riley Thompson