Netflix To Acquire Warner Bros.: Questions Abound

This morning, following an expedited (and closely watched) bidding process, Netflix announced it has entered into a definitive agreement with Warner Bros. Discovery to acquire Warner Bros., including its studios, HBO, and HBO Max. What’s not included in the deal? WBD’s linear TV networks—CNN, TNT Sports, and Discovery Channel—which will be spun off into a separate public company: Discovery Global. This is a big deal and represents a seismic shift across the entertainment industry. However, big questions abound. The biggest: will this deal actually go through?

Netflix Walks A Landmine Of Regulatory Issues

This deal is expected to close following WBD’s spin-off of Discovery Global into a standalone public company slated for Q3 2026. A lot can (and will) happen between now and then. First, there are anti-trust questions. Netflix, before this deal, is already the leading streaming service in favorability and daily usage, according to Forrester data. A combined Netflix and HBO Max offering cements Netflix as the Goliath of streaming services—arguably becoming untouchable.

Second, there are political factors involved with this deal. Skydance Media (which now owns Paramount) called the bidding process “tilted and unfair”—indicating it favored Netflix’s bid. Skydance is owned by the son of Larry Ellison—a close friend of President Trump who reportedly carries considerable influence within the US administration. It’s fair to consider the degree to which this will affect the trajectory and eventual outcome of this deal.

The Streaming Wars Aren’t Just Red Hot, They’re Consolidating

If this deal actually goes through, the combination of Netflix and HBO Max creates advertiser scale and consumer efficiency. Advertisers want mass reach. Netflix is already producing live tent-pole events that attract big brands. But with HBO Max’s incremental user base, IP, and AdTech, Netflix gets far more attractive to mainstay marketing budgets, beyond one-off trials.

Streaming consumers are already price-pinched. Since 2021, the average monthly cost for ad-free streaming services jumped 54%, according to Forrester’s analysis. As yearly increases become the norm, consumers are forced to downgrade, “pause,” or bundle subscriptions to manage costs. At a minimum Netflix will offer a bundle with HBO Max akin to what Disney does with Hulu—relieving users of some cost burden. A lingering question is whether Netflix will fold in HBO Max’s content to form one giant streaming service, or not.

We’re In The Endgame Of Legacy Media—With Streaming Usurping It

In May 2025, Nielsen reported that streaming viewership eclipsed the combined total of cable and broadcast TV for the first time ever. This marks a tipping point: linear TV is now in structural decline, with companies like Comcast losing half their video subscribers over the past decade and Disney’s linear networks posting significant year-over-year drops in revenue and operating income. The “cord never” generation (35% of Gen Z adults) has never subscribed to traditional pay TV, signaling the legacy model is not just eroding, it’s being replaced by streaming. The Netflix-WBD deal assures this inevitability.

Be on the lookout! By the end of this month (December), Forrester publishes The State Of Streaming, US 2025—a data-heavy report filled with insights and trends about the eight major US streaming services, with a focus on consumer usage, ad tolerance, price sensitivity, and more.

Forrester clients: Let’s chat more about the data via a Forrester guidance session.