Streaming platform HBO Max could vanish after its owner inked at $125 billion deal which will see it bought by Netflix.
But the takeover may hit major competition issues with the prospect of two of the world’s biggest streaming platforms combined. And Donald Trump’s view on the tie-up could be crucial.
On Friday, US time, Netflix announced an agreement to buy Warner Brothers’ studios and streaming services including HBO.
The deal will bring together Harry Potter, The Last of Us, Game of Thrones, Friends, The Wizard of Oz and Barbie from Warner Bros with Squid Game, Stranger Things, Emily in Paris and K-Pop Demon Hunters from Netflix.
“Our mission has always been to entertain the world,” said Ted Sarandos, co-CEO of Netflix.
“By combining Warner Bros’ incredible library of shows and movies with our culture-defining titles we’ll be able to do that even better.
“Together, we can give audiences more of what they love and help define the next century of storytelling.”
HBO’s current owner Warner Bros Discovery was formed in 2022. Late last year it announced plans to split into two companies. The new Warner Bros would focus on film studios and streaming and the other, Discovery Global would house its traditional TV business, including CNN, Discovery and sports programming.
Netflix has offered $US82.7bn ($AU125bn) for the former of the two new companies.
The streaming giant had been in a battle with Paramount Skydance which had offered to buy the entirety of Warner Bros Discovery.
HBO Max set to vanish
If a deal goes through it could mean the end of HBO Max as a streaming service. While Netflix has stated it “expects to maintain Warner Bros’ current operations and build on its strengths, including theatrical releases for films,” its announcement suggests HBO’s shows will be rolled onto Netflix’s platform.
“By adding the deep film and TV libraries and HBO and HBO Max programming, Netflix members will have even more high-quality titles from which to choose,” its release stated.
“This also allows Netflix to optimise its plans for consumers, enhancing viewing options and expanding access to content”.
It could offer HBO as an add-on package or simply add its shows to Netflix, potentially upping subscription fees in the process.
However, a takeover by Netflix is likely to hit regulatory hurdles due to the potential dominance of the pairs’ streaming platforms.
Netflix is the world’s largest streaming platform with an estimated 300 million subscribers worldwide and around 7 million in Australia.
Excluding YouTube and JioHotStar, a streaming service mostly focused on India, HBO Max is the world’s fourth biggest platform with around 120 million subscribers.
It launched to great fanfare in Australia this year. Speaking in New York in November, HBO’s CEO Casey Bloys told news.com.au HBO Max had a “very strong launch” in Australia and “we’re very, very happy”.
The firm said it was hoping to be a “top three player” in Australia as soon as next year.
An alternative merger between Warner Bros and Paramount might raise competition issues about bringing two major film studios together but a combination of both firms’ streaming platforms – whose total subscribers would still be smaller than Netflix – would face less regulatory hurdles.
However, over the last few weeks Netflix has floated the concept that a straight comparison of just streaming platforms is to narrow a focus for competition concerns and regulators should look at the reach of YouTube as well.
If that were to occur it would make Netflix and HBO Max’s combined reach seem smaller and less of a concern.
Donald Trump
Another wrinkle for the deal is Donald Trump. The White House has become more interventionist in media mergers.
Mr Trump was said to have favoured a deal between Warner Bros and Paramount as he gets on well with the latter’s CEO David Ellison.
Mr Ellison’s Skydance bought Paramount earlier this year which includes the US’ CBS TV network. Since the buy, Paramount’s new owners have brought in executives to CBS News which some have suggested could make its coverage less probing of the Trump administration.
Warner Bros Discovery owns news network CNN which Donald Trump loathes so he might welcome Paramount taking control.
However, Netflix’s deal with Warner Bros does not include CNN so it could yet be purchased by another firm.
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