Netflix’s proposed acquisition of Warner Bros Discovery’s studios and streaming division could lead to lower streaming costs for consumers. According to two people familiar with the talks, Netflix plans to bundle its service with HBO Max, offering a cheaper combined package if the deal goes through.
During recent discussions, Netflix argued that merging the two platforms would benefit consumers. The company told Warner Bros Discovery that a bundled subscription would reduce overall costs for viewers, the sources said. They requested anonymity due to the confidential nature of the negotiations.
Netflix is also using this argument to address potential regulatory concerns. Combining one of the largest streaming services with a major competitor could raise antitrust questions. By emphasizing consumer savings and broader content access, Netflix hopes to show regulators that the deal would not harm choice or raise prices.
Warner Bros Discovery is currently considering selling parts or all of its business, which includes major film and TV studios, cable networks like HBO and CNN, and the HBO Max streaming platform.
Reuters previously reported that Netflix had already submitted a mostly cash offer for the studio and streaming assets. A successful acquisition would significantly expand Netflix’s content library. However, insiders believe the deal would not dramatically increase Netflix’s market share because most HBO Max subscribers already pay for Netflix as well.
Other bidders, including Paramount Skydance and Comcast, would also use HBO Max and Warner Bros content to strengthen their own streaming services.
Netflix declined to comment on the negotiations, while Warner Bros Discovery also offered no response.
Analysts say the merger could reshape the competitive landscape. Bank of America’s Jessica Reif Ehrlich noted that combining HBO Max with Paramount+ would create a powerful streaming rival to Netflix and Disney+. She added that HBO Max could also elevate Peacock, which is still struggling to turn a profit.
Comcast, which owns NBCUniversal, risks falling behind if Netflix or Paramount Skydance expands through the acquisition, Ehrlich warned.
A successful deal would give Netflix full control of Warner Bros’ vast content library. This includes the entire HBO catalog, the Warner Bros film archive, and major franchises from DC Comics. Ehrlich wrote that while Netflix leads in subscriber numbers, it still trails legacy media companies in owning deep intellectual property libraries that can be monetized across theme parks, live experiences, gaming, and merchandise.
Still, Netflix faces political and regulatory challenges. Pentagon officials have criticized some of its content, and several Republican lawmakers argue that absorbing Warner Bros Discovery could concentrate too much power in Netflix’s hands. YouTube, owned by Alphabet, remains the largest U.S. streaming platform by total viewership.
