Last Friday’s announcement that Netflix has agreed a deal to acquire Warner Bros. Discovery sent shockwaves through the media industry. In a market which has already seen significant consolidation over the past ten years, the tie-up would unite the global streaming leader with not only another major streaming player, but with a massive bank of very valuable TV and film IP. In the US, antitrust concerns were immediately raised, with rival bidder Paramount making competition a key part of its pitch to crash Netflix’s deal.
In Europe, the picture is slightly different. While Netflix is obviously a major player on this side of the Atlantic, it doesn’t account for as large a share of viewing over here as it does in the US (see ITV’s now famous Palooza slide, and Channel 4’s amended version). Warner Bros. Discovery, too, has a very large business in Europe, but again it’s not as central to the market as it is in America.
So what exactly would the ramifications of a Netflix/WBD merger be for the European market?
The right side of the split
While some details of Netflix’s deal remain unclear, the announcement suggested it has agreed to buy WBD’s studios and streaming division once the planned split of the company, announced in June, completes next year.
This is significant as WBD’s linear channels, outside of HBO, will sit on the other side of the split. So will Discovery+, a WBD-owned streaming platform which is already available in Europe. These linear channels, alongside Discovery+, account for a lot of WBD’s business in Europe (indeed Warner Bros. Discovery, when first announcing its plan to divide itself into two separate companies, described the non-streaming half of the company as its ‘Global Networks’ business, suggesting it will contain most of WBD’s international assets). From what’s been said so far, it seems these assets won’t be sold to Netflix.
Recently, HBO has begun launching its paid streaming service HBO Max in Europe, and this is on the side of WBD’s business which Netflix had agreed to buy. It’s already available in markets including France, Netherlands, and the Nordics, and is set to launch in the UK, Germany, and Italy alongside other markets towards the start of 2026.
Since HBO Max is still a relatively new entrant to Europe, there’s not much data on its subscriber count. It’s certainly got a formidable content offering, and executives at WBD have seen Europe as a big opportunity for expansion. But given the service is still rolling out, it’s unlikely that Netflix owning HBO Max would reshape the European streaming landscape, if judged simply by adding Netflix’s subscriber count to HBO Max’s.
A content cut-off?
One big question, however, is whether the Netflix deal will affect European broadcasters’ access to content produced by Warner Bros. Discovery.
This already surfaced as an issue as HBO Max started rolling out in Europe. In the UK, for example, HBO Max’s launch was delayed due to a content rights deal with Sky. Sky has now agreed a deal to bundle the ad-supported version of Max, alongside Discovery+, with its own subscriptions once Max launches next year.
But even for content which WBD doesn’t run on its own channels or services, the Netflix deal could pose a threat in theory, since Netflix hasn’t historically been in the business of producing shows to then license to other broadcasters.
On this point specifically, Netflix’s co-CEO Ted Sarandos suggested on a call with investors on Friday that WBD’s current licensing business will remain intact. “We’ve not produced for third party through our studios,” he said. “They do, and they’re quite successful at it and we want to keep that successful business operating, producing for third parties as well. Netflix Studios doesn’t plan to have a change in that model [for] we continue to produce for Netflix. But the Warner Bros. Television studio will be producing for third parties to continue to.”
Matt Trickett, head of media at Ampere Analysis, says this strategy would make sense for the combined company. “Licensing remains very important for a studio, both in terms of profit generation on content and back-end participants, and it is unlikely to scale back – certainly not in the short term,” said Trickett. “[WBD] also has significant commitments in place for its own platforms […] Perhaps looking to the long term, licensing may get more tactical in nature under Netflix.”
For content which would sit on HBO Max, the future is less clear. WBD has so far been fairly happy to partner with European broadcasters on content and distribution of Max. As an example, just back in September it extended a partnership with RTL Deutschland in Germany, giving it linear and streaming rights to a number of major film titles, despite its plans to launch Max in Germany next year. Would Netflix do the same? Or would it prefer to keep this content on HBO Max, or bring it across to the Netflix platform?
Tim Westcott, practice lead for digital content and channels at Omdia, said Netflix could choose different approaches for different broadcasters. “You would assume that any pay TV agreements would just not be renewed,” he said. “There are not many deals of this kind remaining, however – the long-term deals with Sky in its territories run out at the end of the year. Deals with FTA broadcasters like RTL and ITV would probably continue.”
Westcott pointed to Netflix’s distribution deal with TF1 in France, which will see the streamer host TF1’s content in France starting from next summer, as a sign that Netflix might be open to working with free-to-air broadcasters.
Fewer sales opportunities?
If Netflix were to cut off content for third-party broadcasters, there could be a big impact. Westcott mentioned Who Do You Think You Are and The Repair Shop for the BBC, and Bares für Rares (Cash or Trash) for ZDF as WBD shows which are important for the broadcasters which license them.
But Ampere’s Trickett added that while the loss of WBD content could be painful, “ultimately no one European broadcaster is reliant on any one production company or studio for content”.
For European broadcasters which own studios themselves, content licensing is a two-way relationship. For those broadcasters, Netflix’s acquisition of WBD might sting a bit more, as they may see less demand from the two US businesses.
“Having access to the WB library of a claimed 50,000 TV episodes plus animation and movies could mean Netflix/WBD has much less of a need to make original content,” said Omdia’s Westcott. “It’s been successful with Friends, Big Bang Theory and Rick & Morty, which have built-in audiences giving predictable reach and viewing time, while a lot of originals fail to make it beyond one series. Netflix/WBD will continue to originate as it’s a formula that has worked well, but it may be more selective in future.”
Ampere’s Trickett agreed. “Third-party sales opportunities of content to both Netflix and HBO Max will remain but will perhaps be more limited in nature,” he said. But much will ultimately depend on whether Netflix significantly adjusts its existing content spend trajectory following the acquisition. Executives have suggested that this deal won’t dent Netflix’s current content spending rate, and if that’s the case, there could be an upside for European studios. “If Netflix scales back third-party licensing from WB, this creates opportunities for other studios to sell content to other players in markets,” said Trickett.
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