What does Netflix's offer to buy HBO Max mean for you?

MW What does Netflix's offer to buy HBO Max mean for you?

By Genna ContinoLukas I. Alpert

Subscribers may end up paying less overall if this entertainment megadeal comes to pass

Streaming giant Netflix said on Dec. 5 it will buy film and television studio Warner Bros. Discovery for nearly $83 billion. The acquisition gives Netflix access to a vast film catalog as well as the prestigious streaming service HBO Max.

Netflix announced plans Friday to acquire Warner Bros. Discovery's film studios and streaming assets, including HBO Max, and subscribers of both streaming giants may now be wondering what changes could come to their content and their monthly bills.

While Netflix $(NFLX)$ expects to close the deal - valued at $82.7 billion - in the next 12 to 18 months, media experts don't anticipate any material changes for consumers for at least two years. The deal is still "far from done," according to streaming media expert Dan Rayburn, as the company faces regulatory hurdles, a bidding war with Paramount Skydance $(PSKY)$ and the technical complexity of integrating two streaming ecosystems.

"You're going to have a ton of media and entertainment Hollywood people saying, 'Hey, we don't like this deal,'" Rayburn said. "Netflix already has too much power, they think. Now they're going to have even more power. There's a lot of moving pieces here."

Netflix's stock was down 2.5% in afternoon trading, while shares of Warner Bros. Discovery (WBD) were up 5.1%.

For now, nothing will change regarding membership plans, and the two streaming services will continue to operate separately, Netflix told MarketWatch in an email. Warner Bros. Discovery did not respond to questions about potential changes to HBO Max.

However, comments from executives and how past acquisitions have played out can provide some insight into how the two streaming giants could eventually merge. Here are a few ways a deal could affect subscribers in the coming years.

In the short term: Discounted Netflix and HBO Max bundles

Netflix executives floated the idea of bundling Netflix and HBO Max together in an investor call Friday morning, highlighting the strong overlap between HBO Max subscribers and Netflix subscribers. Netflix subscriptions currently range from $7.99 to $24.99 per month, depending on the plan, while HBO Max plans range from $10.99 and $22.99 per month.

"We think the two services are very complementary," Netflix co-CEO Greg Peters said on the call. "That specifically gives us other levers to think about packaging, and how do we deliver that. We've also seen that some of these bundles and models, if you construct them correctly, have all sorts of retention benefits, engagement benefits."

Morningstar analyst Matthew Dolgin likened Netflix's bundling idea to Disney's $(DIS)$ acquisition of Hulu.

Read more: Netflix set to transform media business - and itself - with $83 billion Warner Bros. deal

"Disney+ and Hulu is definitely the first thing that comes to mind for me as far as what a company might do with two of the most high-profile streaming platforms and most highly subscribed-to streaming platforms," Dolgin said. "You can subscribe to both of them for not very much more than you can subscribe to Hulu alone."

If Netflix moves forward with a bundle deal, people who already subscribe to both Netflix and HBO Max could potentially lower their monthly costs by switching to the bundle, Dolgin said.

"If the platforms are separate, they probably don't need to raise prices at all," he said. "A bundle, almost by definition, means you're paying less for the two services together than you are apart."

Longer term: HBO Max fully integrates into Netflix and prices eventually go up

It's also possible that Netflix could choose to fully integrate the HBO Max catalog into its streaming service, which is what Disney plans to do with Hulu in 2026.

However, integrating one full streaming service into another is complicated and could take at least two years, Rayburn said.

"All the content has to be re-encoded, reindexed, if it's moving to Netflix," he said. "There's a huge back-end infrastructure process that would have to take place."

Read more: Netflix's stock is down 15% from its all-time high at the end of June. Is now the time to buy?

Analysts expect Netflix to eventually raise the cost of its streaming service to account for WBD's valuable catalog of films and TV shows, but regulatory scrutiny could prevent immediate price hikes.

"One of the things that regulators are going to look at right off the bat is reducing a competitor in the market. Does this raise rates for consumers and give them fewer options?" Rayburn said. "That is the biggest thing that they are going to have to deal with when it comes to the regulators challenging them."

Paramount could swoop in as regulatory hurdles loom

Regulators in both the U.S. and Europe are certain to pay close attention to how the deal will affect consumers.

Netflix is by far the biggest streaming service, with over 300 million subscribers worldwide. Warner Bros. Discovery currently ranks fourth overall, with 128 million subscribers worldwide. The combined company would have more than double the customer base of Amazon (AMZN) Prime, the second-largest streaming service, and close to four times the subscriber count of Disney+.

According to Antenna, an analytics firm that studies subscriptions and viewership of major streaming services, Netflix had 69 million total subscribers in the U.S. as of October, while HBO Max had 23.4 million.

Antenna estimates that 10.6 million of those subscribers currently pay for both services, making up roughly 45% of HBO Max's total and 15% of Netflix's.

But analysts say that Netflix is likely to make the argument that its position cannot be viewed solely through the lens of the subscription streaming market, but must be looked at relative to other entertainment platforms, including broadcast networks, cable services and, most important, ad-supported streaming platforms like YouTube, which has the largest audience overall.

"If you define the market this way, Netflix only commands a small percentage of viewers overall, and even adding HBO Max doesn't fundamentally change that," said Jeff Goldstein, managing director of technology, media and telecommunications at consulting firm AlixPartners.

Still, Netflix is likely to face major regulatory hurdles, and CNBC reported that Paramount Skydance, which has 78 million subscribers on its Paramount+ streaming service, offered a final bid to buy Warner Bros. Discovery Thursday night of $30 per share, all cash. In the deal announced Friday, Netflix agreed to pay $23.25 per share of Warner Bros. Discovery in cash plus $4.50 worth of Netflix shares for each share of WBD.

"We think that any realistic amount Netflix would pay to acquire the Warner Bros. streaming and studio businesses would be value-destructive," Dolgin said in a Morningstar note published Thursday. "On the other hand, we believe Paramount would benefit from the scale HBO Max would provide for its second-tier streaming service."

-Genna Contino -Lukas I. Alpert

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December 05, 2025 15:36 ET (20:36 GMT)

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