Here is one way to think about Netflix’s newest mega move. Would you rather watch everything Netflix has released since the pandemic began, or the entire HBO library plus more than a century of Warner Bros. films? That comparison puts the company’s latest acquisition in perspective.
Netflix $NFLX ( ▲ 0.64% ) agreed to buy the Warner Bros. studio business and HBO streaming assets for an equity value of $72 billion, or an enterprise value of $82.7 billion once debt is included. For context, Netflix has spent more than $87 billion on new content since the end of 2019, according to company filings.
Subscribers likely will not need to choose between the two libraries. If regulators approve the deal and current distribution agreements unwind, Netflix will eventually consolidate the Warner Bros. and HBO catalogs under one roof. That could mean higher subscription prices for Netflix users, but the total bill for people who subscribe to both services is still unknown.
Netflix highlighted the upside in its announcement. The company said that adding HBO, HBO Max, and Warner Bros. film and TV libraries will give members a deeper slate of high-quality content and allow it to refine its subscription plans.