Five takeaways from the blockbuster deal

It sounds like a simple merger deal, but it has all the ingredients of a Hollywood drama: a rich and powerful suitor, political intrigue and plenty of interesting twists.

Netflix's deal to buy legendary film studio Warner Brothers Discovery and popular streaming networks HBO is a true story of a conquering giant.

But with regulators and competitors still waiting in the wings, this may just be the beginning of the saga.

As the story unfolds, here are five key points to pay attention to.

Netflix has been making inroads in Hollywood for years, becoming the world's leading streaming subscription company and the largest producer of new content in California.

But the deal – the industry's biggest in years – will reaffirm its leadership position, handing the company a catalog with nearly a century's worth of circulation and increasing its already enormous production capacity.

That's not to mention that its subscriber numbers could increase as Netflix prepares to add some of HBO's 128 million subscribers to its already more than 300 million base.

“Netflix is ​​already the biggest streaming service, and now you add HBO Max to it and it may become untouchable,” said Mike Proulx, vice president at research firm Forrester.

The deal will bring beloved historical franchises like Looney Tunes, Harry Potter and Friends, and HBO hits like Legacies, Sex and the City and Game of Thrones under one roof with less traditional Netflix productions including Stranger Things and KPop Demon Hunters.

The purchase also includes TNT Sports outside the US.

Netflix said it hopes to complete the deal within the next year (18 months).

But executives are coy about whether they plan to incorporate Warner Brothers and its flagship HBO brand into the existing Netflix service.

Netflix co-CEO Greg Peters said the HBO name is “very powerful” and would give the firm “a lot of opportunity,” but did not go into detail.

Netflix may bundle movies and programs into different packages, although analysts say they would be surprised if the HBO brand disappears altogether.

The impact on prices is also unclear.

Netflix's dominance may allow it to charge customers more. But if viewers find themselves paying for one streaming service rather than two, it could cost them less.

Warner Bros is one of the studios that defined Hollywood, creating such classic films as Casablanca and The Exorcist.

But the takeover illustrates how the golden age of cinema has faded.

Forrester's Mr. Proulx said the trajectory is clear: the future is “all-streaming.”

“This deal is official: the end of legacy media.”

Netflix has promised to continue releasing films in theaters, a decision that makes some sense since the company will be acquiring the DC superhero franchise, films that have performed very well in theaters.

But not everyone believes this will remain a priority for the streamer.

After all, Netflix co-CEO Ted Sarandos said earlier this year that he believes going to the movies is an “outdated concept.” And the consolidation is touching a nerve in an industry already struggling with previous job cuts, a manufacturing decline and the threat of artificial intelligence.

Titanic director James Cameron was one of many in Hollywood to anxiously welcome the deal, warning shortly before it was announced that he believed it would be a “disaster” for the film industry.

Completion of the deal is far from guaranteed.

First, Warner Brothers Discovery must complete the spinoff of the parts of its business that it does not sell to Netflix, including CNN, Discovery and Eurosport.

Meanwhile, rival Paramount Skydance, which had hoped to buy Warner Brothers' entire Discovery business, may yet try to convince shareholders it can offer a better alternative.

The biggest question, however, is whether the deal will receive approval from competition regulators in the US and Europe, which could pose a major challenge.

In Washington, lawmakers from both parties have already opposed the agreement, citing concerns that it will limit consumer choice and raise prices.

Mr Sarandos said Netflix, which would have to pay Warner Brothers $5.8 billion if the deal fell apart, was “very confident” it would get approval.

Part of that will depend on how regulators define the competitive landscape, said Jonathan Barnett, a professor at the University of Southern California's Gould School of Law.

If regulators focus only on streaming video, Netflix's increase in market share could raise serious concerns. But if regulators adopt a broader definition that includes cable and broadcast TV and even YouTube as competitors to Netflix, “the concentration problems will become smaller and smaller,” he said.

Rebecca Howe Allensworth, a professor at Vanderbilt Law School, said that typically such a merger would be a “clear challenger,” typically demanding better terms for consumers.

This time, she's concerned that the Trump administration could pressure Netflix on issues like diversity and political bias, as has happened in other cases.

The question looming throughout the debate was whether President Donald Trump would weigh in.

The current administration has promised to ease regulations when it comes to mergers.

But the president spoke highly of Paramount Skydance's owners, tech billionaire and Republican donor Larry Ellison and his son David, who are behind a rival bid for Warner Bros. And Trump has always had a keen interest in the media and entertainment industry.

There was no comment from U.S. competition regulators, but a senior Trump administration official told CNBC he viewed Netflix's bid for Warner Bros. with “strong skepticism.”