Warner Bros. has an infamous history of being bought by other companies and then quickly ending up back on the market after its new owners realize how difficult it is to capitalize on a legacy production studio’s assets. Those challenges are part of what doomed WB’s mergers with AOL and AT&T, who bought the studio in attempts to reinvent themselves. But WB’s latest acquisition deal — this time with Netflix for $83 billion — feels like it has the potential to turn out differently because of how much of a major player within the entertainment industry the streamer has become. It also signals just how far Netflix has come: in less than two decades the streamer has gone from tech upstart to subsuming one of the most storied studios in Hollywood.

Assuming that the deal receives regulatory approval, Netflix will soon own the entirety of Warner Bros.’ (but not Discovery Global’s) assets, which includes HBO / HBO Max, DC Studios, and the legacy studio’s television and film production arms. This would make Netflix the corporate home to many more of the world’s biggest entertainment franchises, like Game of Thrones and Harry Potter, and give the streamer a much larger operational footprint as a proper studio. Discovery Global — which retains ownership of networks including CNN, the Discovery Channel, and TLC — is set to become an independent corporate entity by Q3 in 2026.

This strategic bifurcation and sale of assets was obviously WBD’s desired outcome when the company first announced earlier this year that it planned to split Warner Bros. and Discovery back into two units. Back then, CEO David Zaslav had not yet announced that the company was open to acquisition offers. But you could glean as much from looking at the way that WBD was struggling to turn a profit with its linear cable networks.

Even though WBD managed to pay down a substantial portion of the $55 billion debt it inherited when Discovery bought WarnerMedia, the merged company’s flagging cable TV assets were a major factor in it receiving a significantly downgraded credit score earlier this year. That debt — a holdover from AOL’s disastrous merger with Time Warner — loomed over WBD for the entirety of Zaslav’s tenure as CEO.

A blend of money problems, misguided rebrands, and multiple rounds of layoffs left WBD in a very precarious position that made selling itself off to the highest bidder one of its only viable options to appease shareholders. Those challenges might also be difficult for Netflix to deal with, but this situation feels like it could shake out very differently for a handful of key reasons.

Unlike previous mergers where Warner Bros. was gobbled up by traditional tech giants and telecoms, the new deal is coming at a time when Netflix has long since established itself as a Hollywood power player. In addition to acquiring IP that goes on to become hits, the streamer has built out a robust production infrastructure to spin up wholly original projects of its own. And with many of the platform’s subscriber-generating projects like Stranger Things and Squid Game coming to an end, it’s easy to understand why it wanted to scoop up Warner Bros.’ sizable library of films and series. Netflix doesn’t have the strongest track record of building its own franchises — remember Rebel Moon? — and that’s exactly what it’s getting with WB.

Though Netflix feels like a better acquisition partner compared to Warner Bros.’ previous owners, this is still a consolidation and these kinds of mergers always come with casualties. And it is likely that we will soon start hearing about layoffs as Netflix begins dealing with internal redundancies created by its absorption of Warner Bros.’ employees and operations. But what is much less clear is how the newly merged studio will go about releasing its new projects.

In 2021 during the covid-19 pandemic’s height, WBD’s decision to debut movies on HBO Max as opposed to theaters prompted directors like Christopher Nolan to denounce the company for becoming “the worst streaming service.” Though box office numbers still haven’t returned to pre-pandemic levels, theaters have reopened, and breakout hits like Warner Bros.’ A Minecraft Movie and Superman features have made it clear that there is a demand to see movies on the big screen. Netflix has experimented with very limited theatrical releases that transparently read as plays to qualify its movies for major industry awards. But it has still primarily been a streaming company in the years since it got out of the DVD game.

Unlike MGM, which was on the decline when Amazon bought it, Warner Bros. has had a very strong track record with its recent theatrical releases. Netflix has said that it “expects” to keep putting Warner Bros.’ movies in theaters, but co-CEO Ted Sarandos has signaled that the company is thinking about shortening its theatrical windows in order to “meet the audience where they are quicker.”

“I’d say right now, you should count on everything that is planned on going to the theater through Warner Bros. will continue to go to the theaters through Warner Bros. and Netflix movies will take the same strides they have,” Sarandos said this week in a call with industry analysts.

Netflix has also made abundantly clear that it is open to cutting production costs by using generative AI. The company has not mandated that its collaborators use the technology as part of their production workflows, but it is easy to imagine gen AI becoming a bigger part of the studio now that it has taken on all of the projects Warner Bros. has in development.

The more glaring concern to come out of the new merger is the way that this could impact competition between the major studios and streaming platforms. Netflix has effectively replaced Warner Bros. as one of the Big Five, which will likely change the entertainment industry’s power dynamics. But streaming customers will probably feel these shifts more directly as Netflix and its competitors settle into a new status quo.

Netflix’s prices could go up yet again under the auspice that the service has become more premium with Warner Bros.’ offerings. It’s still not clear how Netflix will handle the HBO / Max brands long term. The company has said that it thinks “HBO and HBO Max also provide a compelling, complementary offering for consumers,” but it would not be surprising to see those brands ultimately going the way of Hulu, which has been turned into a section within Disney Plus.

It has been years since Netflix was a rowdy upstart fighting to be taken seriously. But even though the company has already cemented itself as the world’s biggest TV / movie streamer, this new deal will take it to a different level of prominence. The Netflix / WBD merger will undoubtedly result in changes — some of them bad — that reverberate through the entire entertainment landscape.

But as tumultuous as things will likely feel in the immediate future, it doesn’t seem likely that Netflix will end up trying to sell off Warner Bros. in a couple of years. Acquisitions of this scale aren’t the company’s usual MO, but it has been bullish about wanting Warner Bros. since the studio went on sale. If the deal goes through, Netflix is undoubtedly in the big leagues — now it has to prove it belongs.