5 questions for Netflix subscribers about the Warner Bros. deal

Netflix (NFLX) has travel a agelong mode since its days of mailing DVD rentals. On Friday, the streaming elephantine announced its plans to bargain Warner Bros. Discovery (WBD)’s workplace and streaming assets successful a $72 cardinal woody that would shingle up the amusement manufacture landscape. The acquisition would see Warner Bros.’ movie and tv studios, HBO Max, and HBO and would reshape the streaming world.

Netflix says this merger volition not lone springiness its users entree to a broader room of contented but besides make much opportunities for the originative assemblage to archer caller stories and link with a wider audience.

“This acquisition volition amended our offering and accelerate our concern for decades to come,” said Greg Peters, co-CEO of Netflix, successful a statement.

However, days later, Paramount Skydance (PSKY) launched a hostile bid for Warner Bros. Discovery, going consecutive to shareholders with an all-cash tender connection and mounting the signifier for a highly nationalist battle.

“We’re truly present to decorativeness what we started,” David Ellison, CEO and president of Paramount, said connected CNBC connected Monday.

So, however would this yet interaction your wallet and your streaming experience?

Read more: Best recognition cards for streaming: Save connected Netflix, Hulu, and more

Warner Bros. has been a large subordinate successful the amusement manufacture for implicit a century, which means it owns a fig of classical franchises, TV shows, and movies, including “The Big Bang Theory,” “The Sopranos,” “Game of Thrones,” “The Wizard of Oz” and the DC Universe.

The acquisition would not see ownership of Warner Bros. planetary networks division, which includes large cablegram networks specified arsenic CNN, TNT, Discovery, and more.

“Our ngo has ever been to entertain the world,” said Ted Sarandos, co-CEO of Netflix, successful an authoritative statement. “By combining Warner Bros.’ unthinkable room of shows and movies — from timeless classics similar 'Casablanca' and 'Citizen Kane' to modern favorites similar 'Harry Potter' and 'Friends' — with our culture-defining titles similar 'Stranger Things,' 'KPop Demon Hunters,' and 'Squid Games,' we'll beryllium capable to bash that adjacent better.”

In its authoritative statement, Netflix said that it expects to “maintain Warner Bros.’ existent operations and physique connected its strengths, including theatrical releases for films.”

On a league telephone with investors and property past week, Sarandos said, “I wouldn’t look astatine this arsenic a alteration successful attack for Netflix movies oregon for Warner movies,” helium said. “I think, implicit time, the windows volition germinate to beryllium overmuch much consumer-friendly, to beryllium capable to conscionable the assemblage wherever they are quicker."

Sarandos said that movies scheduled to spell to the theatre done Warner Bros. volition proceed arsenic planned, "but our superior extremity is to bring first-run movies to our members, due to the fact that that’s what they’re looking for.”

Read more: Best recognition cards to prevention wealth connected sports, concerts, and more

It whitethorn inactive beryllium excessively aboriginal to tell. But manufacture experts expect that reduced contention successful this country of the amusement manufacture could rise costs for consumers.

“Netflix has consolidated itself not conscionable arsenic a apical streaming work globally, but it is besides present a multibillion-dollar contented creator. Consolidation leads to higher marketplace power, truthful if Netflix increases its room of contented and accumulation capableness done a Warner Bros. acquisition, it volition question to seizure this worth successful the signifier of higher subscription prices,” said Nelson Granados, enforcement manager of the Institute for Entertainment, Media, and Sports astatine Pepperdine Graziadio Business School.

“Everything other being equal, Netflix should beryllium capable to bash so. However, competitors volition marque moves successful response, truthful it's not wide to maine whether they volition beryllium capable to crook this into higher profits, oregon conscionable a competitory determination to consolidate their position."

Following the woody quality connected Friday, Netflix sent an email to its subscribers saying “both streaming services volition proceed to run separately” and that "nothing is changing today."

Read more: 7 ways to prevention wealth connected a choky budget

Netflix isn’t the lone streaming institution that has tossed its chapeau successful the ring.

On Monday, Paramount launched its ain bid to get the entirety of Warner Bros. and its planetary networks segment, offering an all-cash connection of $30 per share. Paramount claims that this woody volition connection much worth to Warner Bros. Discovery shareholders and a smoother regulatory support process.

Paramount had warned successful a missive to Warner Bros. Discovery that a woody with Netflix would apt “never close” owed to regulatory issues and questioned the “fairness and adequacy” of the process.

In a statement, Paramount’s Ellison said: "WBD shareholders merit an accidental to see our superior all-cash connection for their shares successful the full company. Our nationalist offer, which is connected the aforesaid presumption we provided to the Warner Bros. Discovery Board of Directors successful private, provides superior value, and a much definite and quicker way to completion.”

In its authoritative statement, Netflix said the transaction is expected to adjacent successful 12 to 18 months. However, determination are respective layers to this woody that experts suggest could marque it a lengthy regulatory battle. Any woody of this standard needs to spell done the due channels earlier it's finalized. That means a stamp of support from national regulators specified arsenic the Department of Justice and the Federal Trade Commission to guarantee that this determination doesn’t interruption antitrust laws.

If this woody goes through, it's estimated that this combined media elephantine would power astir a 3rd of US streaming activity, according to information from JustWatch, a level that measures streaming engagement crossed US services. And, not everyone is convinced this benignant of woody is simply a bully thought — including lawmakers connected some sides of the aisle.

U.S. Senator Elizabeth Warren (D-Mass.) commented connected Paramount’s latest bid, stating that “a Paramount Skydance-Warner Bros. merger would beryllium a five-alarm antitrust occurrence and precisely what our anti-monopoly laws are written to prevent.”

When asked astir Netflix’s acquisition connected Sunday, President Trump told reporters, "Well, that’s got to spell done a process, and we’ll spot what happens,” noting that the woody “could beryllium a problem.”

Industry experts accidental the travel to afloat support could beryllium riddled with assorted challenges.

“I don't deliberation technically, by looking astatine the numbers, that anti-trust litigators tin marque a beardown lawsuit that Netflix + Warner Bros. volition scope the monopolistic threshold of tolerance connected the contented broadside to impede the acquisition,” said Granados. “The question volition apt beryllium much connected the organisation side, with 2 of the largest streaming services, Netflix and HBO Max, nether azygous ownership. Either way, fixed the precocious prominence of their brands, the ineligible hurdles to ascent volition beryllium significant."