(Source: Warner Bros. Discovery)

(Source: Warner Bros. Discovery)

A fundamental transformation of Hollywood’s industrial structure is underway. Netflix, which upended the traditional media order by ushering in the streaming era, has moved to acquire Warner Bros. Discovery, a longstanding symbol of Hollywood’s golden age.

The proposed merger and acquisition (M&A), first announced on December 5, 2025, was revised on January 20, 2026, into an all-cash deal valued at USD 82.7 billion (USD 27.75 per share). Warner Bros.’ board of directors unanimously approved the transaction and moved up the shareholder vote to April 2026. This is more than the merger of two media giants: it signals the sunset of the Hollywood studio system that has endured since 1923 and the dawn of a post-Hollywood era—one in which data algorithms increasingly shape artistic creation.

At a February 3 hearing of the U.S. Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights, Netflix Co-CEO Ted Sarandos declared, “We are not here to kill Hollywood, but to save it,” drawing a clear line in the sand. Regulatory reviews by the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) remain pending. Both agencies have already received the Hart–Scott–Rodino (HSR) antitrust filing and launched intensive investigations. The European Commission (EC) has also indicated that it will conduct a stringent review of the proposed deal.

Will this bid to create a “media behemoth” become a lifeline for a stagnating film and television industry, or will it result in a dominant platform that standardizes and homogenizes creative diversity? This article examines the ripple effects of the historic merger now underway on the U.S. audiovisual industry as a whole, focusing on four key issues.

On March 21, Netflix will exclusively livestream BTS the Comeback Live: ARIRANG and
broadcast WWE programming, extending its reach beyond films and scripted dramas
into a broader range of entertainment sectors. (Source: Netflix)

A Clash Between Tradition and Algorithms If the merger is completed, Netflix would become an unprecedented media empire in terms of pure scale. Netflix already boasts 325 million subscribers worldwide and commands more than a 30% share of the U.S. subscription video-on-demand (SVOD) market. Add HBO Max’s 128 million subscribers and Warner Bros.’ vast content assets, and the result would be a colossal ecosystem of more than 450 million subscribers, with a combined market share estimated at 43% globally and 30.7% in the United States.

More consequential than the sheer scale, however, is the “disruptive synergy” the merger would create. Netflix’s deep reservoir of user data, analytics, and recommendation algorithms would be fused with Warner Bros.’ powerful intellectual property (IP) portfolio. Iconic franchises—from the DC Universe’s Superman and Batman to the wizarding world of Harry Potter, and the epic saga of Game of Thrones—would be delivered as hyper-personalized experiences within the Netflix interface. Such a convergence could pose an existential threat to rival platforms including Disney+, Amazon Prime Video, and Apple TV+, potentially reshaping competitive dynamics across the global streaming landscape.

Mike Lee, chair of the U.S. Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights, voiced concern over the proposed deal, describing it as “the complete integration of production and distribution power.” This concern helps explain why Paramount Skydance, which has not abandoned its own takeover ambitions, has strongly opposed the transaction—likening it to a “digital Standard Oil of a new era.” Just as the oil monopoly once controlled the energy lifeblood of the Industrial Revolution, critics warn that Netflix’s potential dominance over content could result in higher subscription prices, reduced compensation for creators, and diminished consumer choice—while concentrating control over modern audiences’ “attention” and “cultural consumption rights.” In response, Netflix Co-CEO Ted Sarandos emphasized the diversity of the competitive landscape, noting that Netflix accounts for “only 9% of total TV viewing time,” trailing YouTube, which holds a 12.7% share.

If Netflix acquires Warner Bros.,
it would gain access to iconic intellectual property such as Superman and Batman. Images shown: Superman (2025) and The Batman (2022) (Source: Warner Bros. Korea)

Growing Anxiety on Production Sets — “Creativity Is Dying” In the wake of the acquisition announcement, the U.S. theater sector and film industry labor unions have mounted strong opposition. Their resistance extends beyond economic concerns, reflecting a deeper anxiety about the preservation of cinema as an art form.

Warner Bros. has long built its reputation as a studio that respects the creative vision of writers and directors. Many of the drama series released under the HBO banner emerged from a production philosophy that prioritized artistic excellence over short-term ratings performance. Landmark works such as The Sopranos (1999–2007) and Game of Thrones (2011–2019) were made possible by an environment that granted creators ample time, autonomy, and creative risk-taking.

Christopher Nolan, a leading voice within the Directors Guild of America (DGA), has denounced the merger as “the destruction of a cultural ecosystem” and declared his full opposition. He has called for an urgent meeting with Netflix executives and is demanding concrete safeguards to protect creators’ rights. In particular, Nolan is urging that a minimum 90-day exclusive theatrical window be written into contracts, arguing that Netflix’s efficiency-driven management model undermines Hollywood’s artistic values.

Director James Cameron has also raised concerns about the growing role of artificial intelligence (AI) and cost-efficiency–driven strategies, warning that “this merger could severely restrict creative freedom and reduce directors to mere ‘content manufacturers.’” Veteran actress Jane Fonda went further, calling the deal “a disastrous transaction that will destroy Hollywood and the entertainment industry,” and sharply criticizing what she sees as the logic of capital encroaching upon the soul of art.

All-Out Resistance by Labor Unions – “A Textbook Case of Antitrust” The three major unions that underpin the U.S. film and television industry—the Writers Guild of America (WGA), the Directors Guild of America (DGA), and the Screen Actors Guild‐American Federation of Television and Radio Artists (SAG-AFTRA)—have, in a rare move, formed a united front against the proposed merger. They argue that the deal represents a “monopolistic overreach” that would simultaneously erode workers’ rights and undermine content diversity. Should a single dominant buyer come to control the market, they warn, experimental and high-risk projects would inevitably be crowded out.

In an official statement, the WGA cautioned that “when the world’s largest streaming company absorbs a major competitor, it will lead to job losses, lower wages, and diminished content diversity.” Concerns from production sets are equally concrete. Lindsay Dougherty, a leader within the International Brotherhood of Teamsters representing technical workers, described the deal as “corporate consolidation driven by greed,” arguing that it directly threatens workers’ livelihoods. SAG-AFTRA likewise warned of potential job cuts, wage compression, and higher consumer prices, emphasizing that weakened collective bargaining power would become the core structural problem.

Meanwhile, production companies remain divided. Some view the merger as an opportunity to reach a broader global audience through Netflix’s vast distribution network, while independent studios warn that “it will become harder to take creative risks.” Netflix insists that it is a “creator- and worker-friendly company,” yet its release contract structures and the integration of the Warner Bros. content library are widely expected to narrow the space in which independent producers can survive.

Netflix has announced plans to increase its 2026 content budget by 10% to USD 20 billion, pledging to expand production capacity in the United States and step up investment in original programming. Citing the creation of 140,000 jobs between 2020 and 2024, the company has also promised further job growth following the merger. However, experience from past consolidations—including Disney’s acquisition of 21st Century Fox in 2019 and AT&T’s merger with Warner Bros. in 2018—suggests that repeated project cancellations and workforce reductions in the name of cost-cutting cannot be ruled out. Concerns over the financial structure of the deal are also mounting. Netflix plans to finance the acquisition with USD 20 billion in cash and USD 42.2 billion in debt. Following the announcement, its stock price fell by 12%, entering what analysts describe as a phase of historic undervaluation. Warner Bros., meanwhile, plans to spin off Discovery Global into two separately listed companies—a process expected to be completed within six to nine months, ahead of the finalization of the Netflix–Warner Bros. merger. As part of this restructuring, Warner Bros. will transfer USD 10.7 billion of its post–spin-off debt, out of a total of USD 17 billion, to Netflix.

Theaters’ Fight for Survival – “Maintaining the 45-Day Holdback” Warner Bros. has traditionally been a major studio that places strong emphasis on theatrical releases. By contrast, Netflix has long advocated shortening the theatrical window. While Netflix’s Ted Sarandos has attempted a conciliatory gesture by pledging to maintain a 45-day theatrical window, skepticism across the industry remains high.

Although Netflix insists that it will “maintain theatrical operations and protect billions of dollars in box office revenue,” trust remains limited. Sarandos’s past remarks describing the theatrical model as “outdated,” along with his long-standing suggestions that release windows could eventually be further shortened, continue to fuel concern. Major U.S. theater chains—including AMC Theatres, Regal Cinemas, and Cinemark—are urging regulators to conduct a rigorous review, warning that diverting lower-performing titles directly to streaming could trigger a wave of closures among small and mid-sized theaters.

Sarandos argues that Netflix’s true competitors are not traditional Hollywood studios, but short-form social media platforms such as TikTok and Instagram. In his view, the real “existential threat” to Hollywood lies in the accelerating shift of audience attention away from feature films and television toward mobile-based short-form video. From this perspective, Netflix contends that acquiring Warner Bros. would not constitute monopolization, but rather a defensive strategy aimed at drawing public attention back to long-form storytelling and high-quality visual art through premium intellectual property.

In 2025, Warner Bros. underscored its theatrical distribution strength at the box office with titles such as Superman, A Minecraft Movie, and Sinners, directed by Ryan Coogler. Some analysts therefore argue that Netflix is unlikely to relinquish such revenue streams lightly. However, uncertainty remains over whether Netflix’s promised 45-day theatrical holdback would apply uniformly to all Warner Bros. releases or be reserved primarily for major blockbusters. There is also concern that mid- and low-budget films could face shorter windows or be diverted directly to streaming—and that these policies could evolve over time.

Regulatory Scrutiny and Political Variables Netflix and Warner Bros. proclaim that they will “define the next century of storytelling together.” Yet persistent fears remain that Hollywood’s artistic traditions and workers’ rights could be compromised in the process. The future envisioned by Netflix centers on a vast content library optimized for “convenience” and “efficiency.” What remains unresolved, however, is how the romance of the movie theater, the stubborn individuality of creators, and the diversity of minority and independent art forms will be preserved within such a system.

The deal is widely viewed as a symbolic event that goes beyond a conventional corporate acquisition, further entrenching the winner-takes-all dynamics of the streaming era. By leveraging its global subscriber base and formidable cash-generating capacity, Netflix would gain control over the entire value chain—from content production and distribution to consumption—potentially emerging as a mega-scale entertainment empire that surpasses even Disney’s vertically integrated model.

There are, however, potential upsides. Consumers could gain access to content in more affordable and convenient ways, and the integration of HBO Max and Netflix programming into a single platform could result in lower bundled pricing, a unified user interface (UI), and more accurate recommendation systems. Moreover, if Netflix’s financial strength is channeled into expanded studio infrastructure and increased investment in original productions, the merger could support long-term growth in industry scale and employment.

However, the negative ripple effects cannot be ignored. These include a decline in content diversity, weakened creators’ rights, the erosion of theatrical culture, and upward pressure on prices driven by monopolistic dominance. Concerns raised by Mike Lee regarding the potential leakage of competitively sensitive information, Paramount’s bid extension (February 20) and ensuing proxy battle, as well as broader political variables, could all influence whether the deal ultimately proceeds. It also remains unclear how the Trump administration’s regulatory stance and enforcement priorities may affect the approval process.

The ball is now in the court of the U.S. Department of Justice and the Federal Trade Commission. More than a routine economic review, their ruling will shape who defines humanity’s visual culture in the next century—and how. With scrutiny from the European Commission also ahead, one of the most consequential moments in Hollywood’s 100-year history has arrived.

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