News broke late Thursday evening in the “who will buy Warner Bros.?” situation. It’s now official: Netflix will buy Warner Bros. for $72 billion. This includes a $5.8 billion breakup fee paid to Warner Bros. if the deal doesn’t go through for any reason.
Again, this sale shouldn’t be allowed to happen, as these companies are already excessively huge. But as I’ve said before, it’s inevitable that Warner Bros. will be sold to someone, plus this marks its third sale in the past decade. And Netflix is one of the better (or less bad) options; the other main bidders are Paramount (whose Trump-appeasing, rightward shift alone would make it owning CNN a nightmare) and Comcast (who’d also be better than Paramount, but it’d reduce Warner Bros. to being a secondary studio to Universal).
Among the plus sides (such as they are), Warner Bros. will still be one of the major Hollywood studios. Also, this deal just applies to the Warner Bros. side—the side that owns Batman, Bugs Bunny, and HBO—not the Discovery side (i.e. CNN, TNT, and Cartoon Network). As such, the cable channel side will still be spun off. Unfortunately, that means a company like Paramount could still buy Cartoon Network, HGTV, and (most importantly) CNN.
Still, as I wrote last month about the Warner sale, this raises questions about how certain aspects will be handled. I’ll summarize and expand on the main points of concern below.
Regulatory approval
While regulatory approval is a concern for any merger, in this case, the Trump administration is clearly on board with Paramount/Skydance to buy all of Warner Bros. Discovery, not just the studio/IP side. That said, bigotry, greed, and corruption/abuse of power are the Trump administration’s main motivations in almost everything they do. Thus, my guess for the conditions of this deal:
- Anti-DEI/diversity efforts like with other companies. More Batman, “Harry Potter,” and “Game of Thrones”; less so “Sinners,” “Craig of the Creek,” and non-white superheroes.
- A “donation” (read: bribe) of some sort to some Trump-related aspect, such as his “presidential library” or White House ballroom.
- Selling Discovery (read: CNN) to Paramount, or a similar right-wing interest.
All of the above would appease Trump and his administration’s interests and goals, while still give Paramount what they probably really wanted, CNN. Paramount or a similar minded interest owning CNN would also remove one major news outlet from criticizing Trump.
Since Netflix is just a streaming service, and doesn’t want the linear cable channel side, they won’t have to worry about broadcast licenses, cable channels, or the like. The only concerns might be HBO and HBO Max, and mostly in more regulation-conscious places like the European Union.
Physical media: DC Comics, DVDs/Blu-rays, and theatrical film releases
The biggest concern about Netflix buying Warner Bros. is the latter’s traditional physical media aspects. Specifically: DC Comics’ comics publishing; Warner’s DVD and Blu-ray production; and Warner Bros.’s theatrical film releases to movie theaters.
For years, Netflix has treated all of these as either a non-factor or a begrudging obligation (for film awards) at best. They’ve also been used to viewing a reliance on algorithms as sufficient, versus actual marketing. Suddenly taking on Warner Bros. might require a change in mindset and comfort zone for the streaming giant.
As such, their options are:
1. The status quo
Warner Bros. keeps their usual film schedule to movie theaters; their existing physical media releases (through Warner Archive and their jointly-run company with Universal) continues; and Wednesday warriors keep getting their usual metric ton of Batman and Batman-related comics.
Given DC has long been viewed as an IP farm for properties to turn into movies/TV shows/toys, that might give Netflix enough incentive to leave it alone.
2. Paring back on physical media
Netflix could start treating these more as an obligatory requirement, and doing little more than what’s required. They’ve already mentioned a desire to pare back on theatrical release windows for films, to much backlash from theater owners and Hollywood.
Netflix could also reduce DVD/Blu-ray releases to just major franchises or collector-aimed options. Expensive 4K steelbooks of the latest Batman movies or major HBO franchises like “Game of Thrones?” Sure. DVDs and Blu-rays of 1960s Hanna-Barbera cartoons like “Secret Squirrel,” or even a modern TV cartoon like “Craig of the Creek?” Good luck. They’d also have major company for the latter—Disney is notorious for not releasing their TV cartoons to DVD/Blu-ray.
As for DC, they might have less room for anything esoteric or not tied to a major franchise. More Batman-related comics, less stuff like the Super-Pets.
3. Ditch physical media entirely
This scorched-earth approach might fit Netflix’s real desires. Warner Bros. could stop releasing most films theatrically, save for what’s minimally or contractually required (for awards, etc.). Netflix could also pull out of their existing DVD/Blu-ray production outlets and shutter Warner Archive; a few big-ticket releases (Batman, Harry Potter) could be licensed to a third party like Shout Factory.
And since superheroes are seen by Hollywood and the general public primarily as TV/movie characters these days, Netflix could just shut down DC Comics as a comic publisher entirely. Any comics desired or needed could be licensed to a third party like Dynamite to publish, and limited to promotional efforts or keeping a few historical/core books published. (At a bare minimum in my opinion: “Action Comics,” “Detective Comics,” “Batman,” “Superman,” “Wonder Woman”; maybe also: “Flash,” “Green Lantern,” “Aquaman,” “Justice League of America,” and a few popular-in-TV/movies secondary characters/concepts like Harley Quinn or the Teen Titans.) Netflix bought Warner Bros. in part because DC’s superheroes are lucrative movie franchises; why bother dealing with printing a bunch of $5 pamphlets?
While it’s possible Netflix sticks with #1, the fear is #2 or (at worst) #3 could come to pass. At this point, there’s a big question mark hanging over all of this, as it all depends on Netflix’s willingness (and degree of willingness) to embrace traditional media.
Streaming: Netflix and HBO Max
The long-term fate of HBO and HBO Max also is a big question in all this. Netflix is the world’s de facto and most popular streaming service, with 301.6 million subscribers worldwide. HBO Max (including HBO the cable channel and Discovery+) totals 122.3 million subscribers.
My guess is HBO and HBO Max stick around for now, as their names are seen as prestigious and big selling points. However, I assume HBO Max is going to be treated like how Disney treats Hulu: as a secondary arm for material that doesn’t fit their core service. In HBO Max’s case, that’d be their back catalog of older movies; Netflix has been allergic to classic films for years, as film buffs have complained. There’s also sharing some of HBO’s lucrative shows with Netflix—expect some “Best of HBO on Netflix” type of hub on Netflix.
As for whether Netflix shuts down HBO Max to fold it into Netflix, a la Disney+/Hulu, I’m not sure.
Animation
While Netflix has had issues with animation in the past, at this point they’re a big step up from Zaslav-era Warner Bros.’s shoddy treatment of the medium. The success of “KPop Demon Hunters” might also make Netflix a bit more likely to support animation. And unlike HBO Max, Netflix is the de facto choice for cartoons for kids (along with Disney+ and YouTube).
As such, Netflix will gain access to a large library of studios: Looney Tunes, Hanna-Barbera, Cartoon Network, Adult Swim, the DC animation library, etc. Presumably, Netflix’s current deals with DreamWorks (a major provider of their cartoons) will eventually expire, with the house of “Shrek” just moving their shows to Peacock.
Still, current deals aside, I expect only some of Warner’s catalog to show up on Netflix. Again, they don’t seem interested in most older material, so I wouldn’t expect Looney Tunes or the Flintstones to appear. (Both are currently on Tubi.) However, those cartoons could show up on HBO Max (reversing some of the content purging), if Netflix wants to still keep things they own under their roof.
As for what cartoons could show up on Netflix, “Scooby-Doo” and parts of the Cartoon Network library (such as “Justice League” and “The Powerpuff Girls”) has been frequent mainstays of Netflix for years. I can also see Hulu’s current library of Cartoon Network and Adult Swim shows (“Steven Universe,” “Rick and Morty,” etc.) moving to Netflix.
Conclusion
Overall, I don’t want this merger to happen either. But as for what happens, I hope Netflix treats the Looney Tunes, DC superheroes, and Hanna-Barbera characters better than Zaslav and Discovery did.
That said, I’d definitely expect a price hike for Netflix… and Netflix is a service I already canceled earlier this year after the previous price hike put it at a few cents shy of $20 a month. Also, given the uncertain future of Warner Bros.’s physical media, if you’re looking to buy your favorite Warner Bros. films and TV shows on DVD and Blu-ray, I strongly advise doing so as soon as possible. Especially if it’s not Batman, Superman, a blockbuster, or a major HBO show.
Image: “KPop Demon Hunters” (Sony/Netflix) and “Looney Tunes” (Warner Bros.)
