Netflix, the company that taught us how to binge-watch, is buying Warner Bros. in a $72 billion marriage of the world’s largest streamer and one of the most storied film and television shops.
The deal—which is expected to close after Warner Bros. Discovery splits its cable networks from its studios and HBO Max streaming business—would bring together some of Hollywood’s most popular franchises.
As streaming customers’ heads spin with choices, this tie-up could mark the beginning of a new era of bundles and plans. Here’s the lay of the land:
Subscribers
Netflix is the industry giant when it comes to paid streaming subscribers. Meanwhile, legacy entertainment companies like Warner Bros. and Paramount have struggled with cord-cutting as more consumers embrace streaming.
Viewing Time
Netflix, which originally stole customers from broadcast and cable TV, has been losing share of U.S. viewing time recently to YouTube. The Google-owned platform is home to a vast and growing lineup of content, from internet influencer-made videos to video podcasts, sporting clips and more.
Content
Warner in June announced a plan to split itself into two companies. One will house its cable networks like CNN and HGTV. The other will hold its TV and movie studios, gaming efforts and HBO Max streaming business. It still plans to complete the split before Netflix’s deal for the studios and HBO assets closes.
Analysts expect Netflix’s deal for Warner to face regulatory scrutiny but, if it is successful, it would give the streamer a deep library of content from film classics like “Casablanca” and “The Shawshank Redemption” to franchises like Batman and Looney Tunes.
Box-office heft
Warner has delivered several hits this year, including “A Minecraft Movie” starring Jack Black. Netflix said Friday it plans to continue Warner’s practice of releasing major movies in theaters, something the streamer does less often.
Netflix has released some high-profile films in theaters such as its Knives Out series and Oscar contenders like “Frankenstein” but generally releases movies straight to its streaming customers.
Warner is also home to popular TV shows like “The Big Bang Theory,” “Friends” and “The White Lotus.” The deal would bolster Netflix’s library, which currently includes series like “Stranger Things” and “Bridgerton.”
What does it all mean for consumers?
Streaming providers have been raising prices as they spend heavily on producing new shows and their subscriber growth slows. Netflix’s highest tier now costs $24.99 a month. The company has embraced ad-supported offerings for the past few years, with its lowest-priced ad-supported tier at $7.99.
HBO Max has also raised prices and adopted advertising: The ad-supported basic plan is $10.99 a month, while an ad-free premium plan is $22.99.
Netflix says it plans to keep HBO Max as a separate service initially after the merger, which could mean households continuing to pay for each separately, at least in the near term. It is unclear how much Warner Bros. content Netflix might incorporate into its namesake streaming service. It could offer new bundles in the future that bring down the cost of having both services or use the deal to create new plan pricing tiers.
Write to Nate Rattner at nate.rattner@wsj.com and Sarah Krouse at sarah.krouse@wsj.com
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