JuicyTalk
It’s happened. Netflix has announced it will be acquiring Warner Bros. Discovery, which means it will also be getting HBO and HBO Max and all of their IP. It’s a little like if McDonald’s suddenly acquired Wendy’s. “Weren’t you guys rivals?” “What if I liked Wendy’s more than McDonald’s?” “Will there still be baconators?” We’ve got a lot of questions.
I shouldn’t say suddenly acquired, because the $82.7 billion acquisition will take anywhere from 12-18 months, and there are already a lot of questions. For some, the fate of theaters is the most pressing question; for others, the likely price hike for Netflix subscriptions is now a worry.
Netflix’s Library Will Expand Massively If The Acquisition Goes Through
It seems likely that Netflix’s acquisition will go through, though 12-18 months is a lot of time; anything could happen. However, it does seem like both Netflix and Warner Bros. Discovery are happy with the deal, and there’s a 5.8 billion breakup fee for Netflix if they get cold feet (via THR). Assume it’s happening.
When it does, Netflix’s library is going to expand massively. There really won’t be any streamer that will be able to compete with its quantity. It’s currently unknown where HBO’s IP and other properties will be available or whether HBO Max will even continue to exist in this new landscape.
Netflix Has Been Continuously Raising Subscription Prices
This is a costly move, though co-CEOs Ted Sarandos and Greg Peters seem certain that this will be a moneymaker for Netflix, projecting $2 to $3 billion in savings annually. What they don’t spell out is exactly how they plan to earn those savings. Maybe it’ll be from more subscribers, but maybe it will be from current subscribers.
Netflix is no stranger to raising subscription prices, having done so only a year ago in January 2025. The plan could very well be to raise plan prices as soon as this deal goes through. In Netflix‘s press release, they mention increasing shareholder value by, among other things, “generate[ing] incremental revenue and operating income.”
That incremental value and operating value could very well come from current subscribers being asked to pay more for subscriptions. Now, without HBO Max, there’s one less streaming service to turn to if you aren’t willing to pay what Netflix charges.
It’s Too Soon To Say How The Warner Bros. Buyout Will Affect Netflix Prices
Still, Netflix has not mentioned anything about raising prices, so everything is speculation at this point. Michael D. Smith, professor of information technology and policy at Carnegie Mellon University, said this about price increases (via Today),
“They keep raising their prices, and what that tells me is they’re able to see when we raise our prices, how many subscribers do we lose? And so the fact that they keep raising their prices says to me we’re not losing a whole lot of subscribers.”
He goes on to say,
“I don’t think they’ll raise it a whole lot, but I think we’ll probably see an increase in Netflix prices. I don’t think they’re going to see a whole lot of loss of subscribers because the subscribers are going go, ‘Holy crap! I can watch ‘Friends’ now and ‘Harry Potter’? Sure!”
So it seems likely we could see some price rises. Michael does point out that if you’re currently subscribed to both services, this could amount to a price decrease, as you may no longer be paying for both Netflix and HBO Max. Netflix and HBO Max solo subscribers may be out of luck, it seems.
