What’s the Point of Buying Warner Bros., Anyway?
Netflix, with its 325 million subscribers, swears its potential (if not likely) acquisition of Warner Bros amounts to vertical integration.
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Hollywood’s longest-running soap opera may be nearing its final episode.
After reopening negotiations last week, Warner Bros Discovery said on Tuesday that it had received Paramount’s latest and greatest acquisition offer, which came in at $31 per share and now may be the most appealing bid, according to reports. Now begins another review process, and if the board prefers the deal, Netflix will be given a four-day window to present a (presumably) final counterbid. But what are these media giants bidding for exactly?
Up, Down, Left, Right
Paramount and Netflix look at WBD and see different things. For Paramount, the acquisition would amount to pure horizontal integration, pairing two of Hollywood’s remaining legacy studios to achieve the scale needed to truly compete in the streaming age. According to the most recent tallies, Paramount+ has 79 million subscribers, while WBD’s HBO Max has about 128 million.
Netflix, with its 325 million subscribers, swears its potential (if not likely) acquisition of WBD’s streaming and studios unit amounts to vertical integration, not consolidation en route to apex predator status. After years of saying otherwise, Netflix is suddenly interested in the theatrical box office. WBD, on the other hand, recently scored its ninth-straight debut at the top of the US box office with the recent release of its Wuthering Heights adaptation. Co-CEO Ted Sarandos has also touted how roughly 80% of HBO Max subscribers also subscribe to Netflix as proof that the two services are complementary.
Either way, a new era in media and entertainment appears imminent:
- After a period of massive expansion, subscriber growth across the entire industry is beginning to slow. According to market data firm Antenna, premium services added only 18 million subscribers in the final quarter of 2025, resulting in year-over-year growth of just 7%, compared with 27 million new subscribers and 12% growth a year earlier.
- YouTube, meanwhile, continues to dominate TV time in the US. According to Nielsen, the Google-owned platform regularly accounts for 12% to 13% of all monthly TV viewing, more than any rival. Sarandos has argued that a combined Netflix-WBD venture would create a Hollywood-centric entity capable of competing in a new tech-dominated landscape (Note: Instagram launched a Reels TV app in December).
HALOw Blow: To put it in the parlance of the buzzy HALO framework (that’d be: Heavy Asset, Low Obsolescence), WBD isn’t exactly checking the second box. On the other hand, its rich library of intellectual property, running the gamut from Batman to Harry Potter and Tony Soprano, certainly qualifies as asset-heavy. Does partial credit count in an $80 billion bidding war for the media world’s most passed-around company?
