Netflix’s acquisition of Warner Bros. and what it means for the American film industry
By JONAH BERMAN — arts@theaggie.org
After 2025, the state of American cinema is two-fold. On one hand, films like “One Battle After Another,” “Sinners” and “Weapons” have been universally lauded for their originality. Conversely, the studio system — the historical foundation for America’s film industry — has never seemed so close to total collapse, according to The Hollywood Reporter.
Overall, 2025 was an abysmal year for the box office. The United States studio industry earned $8.7 billion dollars in revenue, falling below the expected $10 billion figure that was observed before the COVID-19 pandemic.
Meanwhile, other countries don’t seem to have the same problem; in China, box office earnings ballooned 22% in 2025 from 2024. Cinemas nationwide are displeased, as Mike Sherrill, the chief operating officer of dine-in cinema chain Alamo Drafthouse noted to Variety.
“There’s an unfortunate trend, which [is] that we just can’t get the industry to $9 billion at the domestic box office,” Sherrill said. “It looks like it’s going to be two years in a row that the industry flatlined.”
Streaming services have become more popular and financially successful than ever before. In the third quarter of last year, Netflix reported a 17% increase in earnings from 2024. In 2024, Netflix’s U.S. revenue had already surpassed theatrical earnings by almost 100%.
Thus, the meteoric rise of streaming services — coupled with the comparatively dire straits of the old guard — has led to an unprecedented era of studio consolidation.
Within the past six years, Disney purchased 21st Century Fox, Amazon bought Metro Goldwyn Mayer and Paramount has merged with Skydance.
On Dec. 5, Netflix proposed a purchase of Warner Bros. for nearly $83 billion, which could be completed by the end of 2026 after approval by regulatory agencies. Warner Bros. were open to the sale, likely because of the significant debt they hold, which would be ameliorated by Netflix’s purchase. If the deal goes through, it could spell the end of the theatrical experience as we know it.
While that prescription is perhaps overzealous, the proposed acquisition would certainly be detrimental to an industry already struggling to financially get back on its feet. Firstly, the merger would increase consolidation in Hollywood, reinforcing oligopolistic conditions, as Northwestern University professor Rick Morris noted via Northwestern Now.
“The consumer might also be concerned,” Morris said. “While it would seem that concentration of the intellectual property and streaming might lead to new discounts, it can also lead to pricing power that would directly affect the pocketbooks of millions if the prices were to go up.”
Filmmaker Sean Baker also warned against the explosion in streaming during his acceptance speech for “Anora,” for which he won Best Director at the 2025 Academy Awards.
“Where did we fall in love with the movies?” Baker asked. “At the movie theater, watching a film in the theater with an audience is an experience. We can laugh together, cry together, scream in fright together. Perhaps, sit in devastated silence together. And in a time in which the world can feel very divided, this is more important than ever.”
With these words, Baker demonstrated why an acquisition of Warner Bros. may be dangerous for the medium. In the past, Netflix opposed extensive theatrical windows for films. Although the company initially claimed Warner Bros. films would remain in theaters for extended runs after the acquisition, they quickly reversed their position. During a call with investors, Netflix Chief Executive Officer (CEO) Ted Sarandos remarked on the possibility of cutting theatrical windows.
“I think, over time, the windows will evolve to be much more consumer-friendly,” Sarandos said.
What does “more consumer-friendly” mean? Netflix has already proposed limiting the theatrical windows of Warner Bros. films to only 17 days, according to sources from Deadline. That’s a significant decrease from the recent average of 30 days, already a notable drop from 20 years ago, when the average was four and a half months.
The possible sale to Netflix represents yet another controversy for Warner Bros. Discovery CEO David Zaslav, who has already been widely criticized for his cost-cutting actions — such as canceling two nearly-finished film projects for a tax write-off. Just three years ago, Zaslav was defending theatrical releases, and The Hollywood Reporter wrote that he was trying to position Warner Bros. as the anti-Netflix. Not anymore.
With the precedent Netflix has set, it’s no surprise that film buffs nationwide are distraught at the state of Hollywood.
But the theatrical experience isn’t completely dormant, as fans of indie films still frequently flock to theaters. Notably, A24 and Neon have prided themselves on giving critically acclaimed films such as “Marty Supreme” (2025) and “Parasite” (2019) theatrical releases.
Furthermore, Hollywood power players wishing to revive the medium may take inspiration from United Artists, which was founded in 1919 by Charlie Chaplin and other filmmakers in order to prioritize artistic control, while maintaining wide theatrical distribution. Eventually, United Artists would distribute classics like “Rocky” (1976), “West Side Story” (1961) and “Some Like it Hot” (1959). These theatrical releases have left a legacy that films designed for streaming rarely do.
Similarly to previous studio mergers, The Netflix–Warner Bros. deal will likely go through; however, what happens next is far from predetermined. In the meantime, creatives and filmmakers like Christopher Nolan continue to hope that society will reward the theatrical experience and forge a new path forward for American cinema.
“When this crisis passes, the need to live and love and laugh and cry together, will be more powerful than ever,” Nolan said in an article by The Washington Post.
Written By: Jonah Berman — arts@theaggie.org
