“It may be the least worst option,” one HBO insider said of the deal. Above: Stranger Things; House of the Dragon.
Photo-Illustration: Vulture; Photos: HBO, Netflix
As huge swaths of the movie business are freaking out over the news that Netflix may soon control the iconic Warner Bros. film studio, folks in TV land are furiously trying to figure out what the deal means for the company’s other crown jewel, HBO. The most prestigious brand in television — and its streaming counterpart, HBO Max — could soon be under the purview of a streaming colossus whose reputation in so many ways has been the exact opposite of HBO’s: endless scroll versus curation, binge releases versus the sacred Sunday-night episode, data-driven decision-making versus gut calls by programmers. And yet despite those stark differences, folks inside the current Warner Bros. Discovery probably don’t have reason to panic — not yet, at least.
For one thing, despite its huge resources and bank reserves, the company still needs to get past regulators in both the U.S. and Europe, as well as the very real possibility of a jilted David Ellison and Paramount trying to derail the agreement, making it far from certain today’s announcement will end with an approved deal. “I would guess it’s 50-50 they are even able to close it,” one WBD insider told Vulture on Friday, adding that the process could drag on for close to 18 months, if not longer.
And then there’s the fact that corporate takeovers have become depressingly commonplace inside the halls of HBO and its sister studio. If the Netflix deal closes, Warner Bros. will have had four owners, and four incarnations, within roughly the space of ten years: Time Warner (the old combination of Warners and Turner Network), WarnerMedia (the brief AT&T phase), WBD (the David Zaslav era), and whatever name Netflix settles on for its reign. Given all of that chaos, “The emotions are not all that high,” another veteran WBD staffer says. “Most of the time in these situations, the anxiety comes from not knowing what to expect. Everyone knows how this will play out.”
Well, sort of. The part where everyone waits to see what jobs the new owners will eliminate or who everyone will report into — all that is sadly par for the course at WBD and, quite frankly, at legacy-media companies since the streaming bubble burst a few years ago. Anyone who works in product development making sure the HBO Max app runs smoothly or that shows get added to the platform properly (or not) has probably been checking LinkedIn daily for a few years now. “If you’re in tech, you’re probably a little bit nervous right now,” the WBD staffer says.
But for anyone in programming and possibly even marketing, particularly content bosses Casey Bloys and Francesca Orsi, today’s news might actually be … not awful? “It may be the least worst option,” the WBD insider says of Netflix taking over Warner Bros. and with it HBO and HBO Max. Staffers at the company are taking comfort in what Netflix co-CEOs Ted Sarandos and Greg Peters said about HBO on a call with Wall Street analysts just after the deal was announced. Both men indicated they wanted to run both HBO and Warner Bros. Television as semi-autonomous units with the TV studio selling shows to outside networks and HBO (and possibly HBO Max) continuing “to operate as they are,” i.e., as separate entities within the larger Netflix universe. “They are saying all the right things,” the WBD insider said, somewhat hopefully.
Then there’s the fact that Sarandos in particular has for years been enamored of HBO and what its brand means, famously saying in the early 2010s that he wanted to turn Netflix into HBO before HBO could turn into Netflix. While it soon became clear that Netflix had much grander ambitions — to become a general entertainment giant versus a boutique brand — Sarandos has always held up HBO as an ideal for premium TV. “I thought of them as the gold standard of original programming,” Sarandos told New York in 2017.
Because of that, for all the skepticism many in Hollywood have about Netflix’s algorithmic ways and global scale, an industry exec who knows both companies said he believes the streamer won’t try to erase its identity. “I don’t think Ted is going to want to be the person that destroyed HBO. He’s obsessed with HBO,” this person said. “I really do think he will find some way to keep that business going and carve it out” from the broader Netflix offering. Another industry insider familiar with both Netflix and HBO concurred: “Consumers really love HBO. They’re not going to want to fold it into Netflix and let it disappear.”
What is in question is exactly how audiences will get access to HBO and the platform currently known as HBO Max. In their call with analysts, Sarandos and Peters talked about potential ways of bundling HBO content with Netflix, hinting the service could become an add-on premium tier to the main Netflix offering, or that consumers could subscribe to both services for a discounted price, à la the Hulu/Disney+ bundle. “A big chunk of Netflix customers are currently HBO customers, and they’re currently paying 100 percent more to get HBO,” the insider said. Offering the two platforms for a lower price would immediately help with audience retention for both HBO and Netflix.
What’s more, Netflix’s global scale and platform superiority would make it easier for HBO to get big audiences for its critical hits. Shows like Succession, for example, have racked up huge Emmy wins and critical buzz but often reach a fraction of the audience of similar critical darlings from Netflix (think Adolescence). At least in the streaming age, “HBO has never had the resources or the tech that Netflix does,” the industry insider said, adding that it wasn’t surprising that Warner Bros.’s efforts to use the HBO brand to scale up a general-entertainment streamer didn’t result in HBO Max becoming a blockbuster service. “Trying to convert the HBO brand, which was a very specific brand, into a general-entertainment service is a very difficult thing to do.”
But on Netflix, HBO — with or without the trappings of “Max” — will be able to act as a destination for premium content, giving Netflix the chance to guide audiences to shows with something other than an algorithm. And for HBO and its leadership, it would offer a chance to get back to what the network had been before the streaming wars started: an upscale option in a superstore universe. “If their idea is to offer HBO as some sort of premium tier, well that is the model of basic cable, which is what Netflix has turned into,” one WBD insider says. “Could HBO exist happily in that setup as they have for the last few decades? I think so.”
