How Will HBO Change Under Netflix?

In 2012, Netflix co-CEO Ted Sarandos infamously said the company’s aspiration was to “become HBO before HBO becomes us.” But with the streaming giant set to spend $83 billion to acquire what it once aspired to be, it raises the question of how the two will coexist.

Netflix’s integration of the prestige cable brand and streaming service marks the company’s biggest challenge yet, as it’s never had to deal with an acquisition of this size. It also represents a new chapter for HBO, which has been tossed around between multiple corporate owners, including Time Inc. and AT&T, and has seen its streaming strategy shift several times. Since 2022, it’s been in the hands of the David Zaslav-led Warner Bros. Discovery, which struggled to balance HBO’s adult-appealing brand with creating a streaming offering that could expand into something for everyone, including kids and families. 

“The original Warner Bros. Discovery merger was intended to create a conglomerate that could do everything — combine the most productive unscripted content business with a best-in-class premium entertainment business, and you have an entity operating at the highest level across the full spectrum of TV and film entertainment,” Ampere Analysis research director Fred Black told TheWrap of efforts to blend programming from HGTV and Food Network with “Game of Thrones” and “The Sopranos.”

“Ultimately, though, it fell down because it was too large, and the brands involved were too disparate to center around one streaming service.”

While Netflix executives have said HBO will “operate largely as it is” after the acquisition goes through, experts believe that over time, you’ll see bigger changes in its business. HBO Max and Netflix will start separately but integrate down the line, similar to how Hulu lives within Disney+ now. Likewise, the HBO cable channels could be a place for experimentation, with some of those potentially taking on streaming life as a dedicated channel within the core Netflix service. And while merger cost cuts are inevitable, Netflix will likely give a boost to HBO not only in audience size, but in resources thanks to its deep pockets and global production capabilities. 

We’ll likely get more answers when Sarandos and Warner Bros. Chief Strategy Officer Bruce Campbell answer questions at a hearing on Capitol Hill next week and as antitrust regulators like the Department of Justice and European Commission scrutinize the deal’s impact on prices, competition and the entertainment industry as a whole over the coming months.

“If the government senses that there will be budget decreases or ‘economies of scale’ being exercised against HBO, it would be all Trump needs to shut down Netflix’s pursuit to favor Paramount instead,” former NBC Studios president and Bullseye Entertainment founder Tom Nunan told TheWrap. “If anything, there’s a world where Netflix commits to even bigger spends and continued creative freedom to reassure the government that jobs will be added, not cut, and that the industry as a whole will expand under Netflix’s ownership, not contract.” 

HBO Max’s long-term fate in the air 

Warner CEO David Zaslav and Netflix executives both have said HBO Max will stay as a separate offering in the near-term after the merger. But Netflix co-CEO Greg Peters was a little more vague about the long-term plan when asked the question directly in an interview with Stratechery last week.

“This is the kind of thing we would want to sort out,” Peters said. “We want to do some more work on that one. I would say we know from our work in doing this with other providers that there are benefits. We can make a win-win, we can make a better product for consumers, lower price ultimately, and it works better for the business, we know that that’s capable.”

Andy Goldman, HBO’s former vice president of programming strategy and planning, told TheWrap there’s a benefit to keeping HBO Max around as a cheaper, separate offering to upsell subscribers to Netflix, as well as experiment with different release strategies and cross-promote its content. 

“Sunday night will still be a big night for launching things on HBO. Netflix usually drops things at 3 a.m. ET, so there’s not really conflict there, but I can see them using the HBO audience to say, ‘Hey, look, here’s the first episode. Now you have to upgrade to Netflix’,” Goldman said of teasing Netflix programming on HBO. “Everything should be going back to the mothership, and the mothership is Netflix.”

Veteran TV producer Evan Shapiro argued that the marketing, distribution and operational elements of HBO Max are “redundant” to Netflix and believes the integration would likely mirror Disney’s acquisition of Fox’s entertainment assets in 2019, which would mean job losses.

“Inside Netflix, HBO becomes a studio label, not an operating channel — like Fox inside Disney and specifically FX and Nat Geo inside Hulu/Disney+,” Shapiro told TheWrap. 

Shapiro added that HBO Max’s value to Netflix in the near-term is its growing reach internationally. The service, which is now available in over 100 markets, launched in Germany, Austria, Switzerland and Italy in January and will expand to the U.K. and Ireland in March. 

Black also expects that HBO Max and Netflix’s integration will be similar to Hulu and Disney+, with a “consumer-benefitting bundle eventually making way for a more integrated, higher cost joint platform.” 

“Integrating the HBO brand would allow Netflix to separate the most premium end of its content from everything else, and eventually that is likely to live under a separate, HBO-branded hub within the platform,” Black said. “Access to that may come at an additional tiered cost, and/or be available standalone for consumers who want access to the HBO content but not the rest.” 

Antenna estimates that HBO Max and Netflix had 10.6 million U.S. subscribers who paid for both services as of October, representing 45.2% of the former’s base but only 15.3% of the latter’s base in the country. The firm’s data doesn’t include free tiers, pay TV distribution or select bundles. 

Whether Netflix decides to phase out HBO Max will ultimately come down to the audience’s engagement with the two services once acquired and the willingness for consumers to pay for another tier that offers the combined portfolio. It also may be a slow process due to existing deals with other streaming services, most notably its bundle with Disney+ and Hulu. 

“Breaking these contracts, many of which are with companies that Netflix will need to continue to work with, would be both expensive and create significant friction,” Black said. “So they are more likely to be allowed to lapse over time, with HBO Max necessarily remaining standalone for at least that period.”

What happens to the HBO linear channel?

Netflix has also said it would continue to operate the HBO cable networks as normal, despite previously expressing no interest in acquiring that type of asset. Experts told TheWrap it makes sense for Netflix to milk HBO cable’s profits for as long as it remains economically viable rather than prematurely shut things down. 

“The real key here is to get more people to move away from HBO on the linear side and appreciate the Wi-Fi virtues of Netflix. You have some people who don’t like to change, but they’re looking at the long tail, they’re going after those people’s kids,” Goldman said. “They’re going to keep it around until they can convince enough people [to switch].” 

At the same time, there’s an opportunity to further exploit HBO’s cable channels on streaming. While HBO Max already has 24/7 themed channels that run programming throughout the day inside the service, Netflix could look to create a similar offering on its own platform, mirroring its deal with France’s TF1 slated to launch this summer. 

“Having a HBO channel (or a few) running alongside themed channels for other types of Netflix original content, each centered around an area that performs well on-demand, would potentially benefit the whole platform, particularly when the library is about to get significantly larger,” Black said.

HBO Max has channels dedicated to IP like “Harry Potter” and “Game of Thrones,” but also film-related channels for Comedy, Hits and more that mirror HBO’s successful cable strategy throughout the 1990s and 2000s, which offered subscribers access to channels that showed a loop of movies across specific genres.

How will the merger impact HBO’s content budget and team?

While Warner Bros. Discovery has spent much of the last four years cutting costs, Netflix has been increasing its content spend every year, which could be a tailwind for HBO. 

Black said that HBO under Netflix would most likely have a greater budget than it currently does, with the possibility that Netflix’s premium drama budget moves under the HBO banner and team. However, he said the total budget will likely be less than the current HBO and Netflix premium original budgets combined.

In 2025, Netflix spent $18 billion on content and said during its fourth quarter earnings call that “content amortization” costs would increase by 10% in 2026. Warner Bros. Discovery does not break out its content spend figures. 

“In the near term, they will continue to invest in HBO’s premier content,” Paul Hardart, a professor at New York University’s Stern School of Business and former Warner Bros. executive, told TheWrap. “As they start to understand the relationship between the customer bases and the brands, they will likely refine and determine the optimum mix to maximize customer acquisition and retention.”

Netflix also said that Warner Bros. studios, and by extension HBO through licensing deals, will remain a “leading supplier” of content to the industry, though it’s unclear how much, if at all, the licensing strategy for its original series will change.

In 2023, HBO CEO Casey Bloys acknowledged that HBO Max saw viewership bumps after their shows like “Insecure” and “Ballers” were licensed to Netflix and praised the network’s longstanding practice of syndication as a “brass ring.” But he also acknowledged at the time that popular original streaming titles like “The White Lotus” and “Succession” wouldn’t get the same treatment.

“What you have to balance is not putting too much out there so people think, ‘Oh, I’ll just wait until it comes here or here,’” Bloys said. “I don’t really know the right answer. I don’t think anybody does.” 

At the same time, some corners will likely be cut as the merger is targeting $2 billion to $3 billion in cost savings three years after the deal’s closing. Netflix’s chief financial officer has said the majority of those savings will come from overlapping support areas of the business and technology expenses, and will presumably include “some content efficiency” over time. 

Though workforce reductions are also to be expected under mergers, Peters said Netflix is interested in “keeping that HBO team” led by Bloys post-acquisition, at least for now. Bloys, who has already survived two previous Warner Bros. corporate mergers and overseen HBO’s programming since 2016, has been a key driving force behind the network’s consistently strong showing at the Emmys over the last decade and has already worked closely with Netflix content chief Bela Bajaria. He previously said he wasn’t concerned about the M&A process.

“That HBO team is good at working with that talent and giving them the environment that they need to tell those amazing stories. And they get to do it under a great brand that speaks to the kind of program they’re trying to make,” Peters said. “We’re going to give them a bigger audience.”

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