Friday morning’s news that Netflix will buy the Warner Bros. film studio, HBO and HBO Max for $83 billion marks a huge earthquake in the entertainment industry, but what it means for consumers remains unclear.
Warner Bros. began its life in Western Pennsylvania when brothers Harry, Albert, Sam and Jack Warner opened their first movie theater in New Castle in 1904. A year later, the brothers founded the Duquesne Amusement Supply Co. in Pittsburgh to distribute films. By 1918, the brothers founded the Hollywood studio that, from there, grew into the media company that would eventually include HBO and a television studio that at times produced the largest share of series for TV and streaming.
In a press conference call early Friday, Netflix executives hedged on their exact plans for Warner Bros.’ streaming service, HBO Max, and whether it will continue to exist as a stand-alone service or be subsumed into Netflix.
“We think it’s quite early to get into specifics of how we’re going to tailor this offering for consumers,” said Netflix co-CEO Greg Peters. “Needless to say, we think the HBO brand is very powerful for consumers. We think the offering could constitute and would constitute part of our plans in how we structure those for consumers, and that gives us a lot of options to figure out how do you package things in different ways to make sure we’re maximizing the value for consumers.”
Netflix co-CEO Ted Sarandos said the HBO model “is working and quite beloved by consumers and we want to keep investing in that and investing as planned in Netflix as well.”
He said there is a high overlap of existing subscribers who already buy both Netflix and HBO Max.
“That number is quite large,” Sarandos said. “That gives us other levers to think about packaging and how do we deliver that. We’ve also seen with some of these bundles and models is if you construct them correctly, [they] have all sorts of benefits, retention benefits and engagement benefits as well.”
Those statements suggest HBO Max may be maintained as its own service that will be available separately but likely also offered in a subscription bundle alongside Netflix.
Netflix executives were clear, though, that they intend to use the existing library of Warner Bros. movies, TV shows and older HBO shows to increase the offerings available on Netflix.
The implications of Netflix gaining government approval for its acquisition of Warner Bros. – the deal still has to clear regulatory hurdles and there are plenty lining up to protest it — are huge for Hollywood, and not necessarily for the better.
Where once there were six major studios making movies and TV shows – Universal Pictures, Paramount Pictures, 20th Century Fox, Warner Bros., Walt Disney Studios and Sony Pictures – where creators could pitch and sell their ideas for movies and TV shows, the combination of Warner Bros. and Netflix will take that number down to four following Disney’s 2019 acquisition of Fox.
And then there’s the potential impact on movie theaters.
For years, Sarandos has been adamant that putting films in theaters “is not our model.” Some Netflix movies do get a brief theatrical release, mostly to qualify for the Oscars and other awards, but Netflix movies typically don’t go to theaters with the robust multi-million-dollar marketing campaign behind them that a major studio release gets. Taking out Warner Bros. as a distributor could lead to the shuttering of movie theaters if there are not enough films released theatrically to sustain theaters as a business.
Sarandos defended Netflix’s theatrical strategy on Friday.
“It’s not like we have this opposition to [putting] movies into theaters,” Sarandos said. “My pushback has been mostly in the fact of the long exclusive windows [that films stay in theaters before going to streaming], which we don’t really think are that consumer-friendly. But when we talk about keeping HBO operating, largely as it is, that also includes their output movie deal with Warner Bros., which includes a life cycle that starts in the movie theater, which we’re going to continue to support.”
Sarandos also said the amount of time a movie spends in theaters before going to a streaming service may “evolve” (e.g. “grow shorter”).
“I wouldn’t look at this as a change in approach for Netflix movies or for Warner movies,” he said. “I think, over time, the windows will evolve to be much more consumer-friendly, to be able to meet the audience where they are quicker … I’d say right now, you should count on everything that is planned on going to the theater through Warner Bros. will continue to go to the theaters through Warner Bros., and Netflix movies will take the same strides they have, which is, some of them do have a short run in the theater beforehand. But our primary goal is to bring first-run movies to our members, because that’s what they’re looking for.”
Theater owners group Cinema United came out against the Warner Bros.-Netflix merger, calling it “an unprecedented threat to the global exhibition business,” as did a European theater owners group.
And there are worries from the Hollywood creative community, too, with the Directors Guild of America saying the proposed deal raises “significant concerns” stemming from the idea that approval of the merger will lead to one less place creatives can pitch their film and TV projects.
‘The Pitt’ gets CCA noms
ER drama “The Pitt” received four nominations in the Critics Choice Awards, including best drama series, best lead drama actor (Noah Wyle), best supporting drama actor (Patrick Ball) and actress (Katherine LaNasa).
The 31st annual Critics Choice Awards will air live on E! and USA Network on Jan. 4.
You can reach TV writer Rob Owen at rowen@triblive.com or 412-380-8559. Follow @RobOwenTV on Threads, X, Bluesky and Facebook. Ask TV questions by email or phone. Please include your first name and location.
