🤳 This is Part 2 of our three-part series on Netflix’s acquisition of Warner Bros. Read Part 1 here for the business breakdown.

That’s all, folks. Over the weekend, Netflix announced it would acquire Warner Bros. Discovery’s film and television studios, along with HBO Max, for a staggering USD 82.7 bn in enterprise value. The agreement, which positions the streaming giant as the new owner of one of Hollywood’s most storied studios, brings together Netflix’s global streaming dominance with a century-long legacy that includes Game of Thrones, Harry Potter, the DC Universe, as well as timeless classics like Casablanca, Citizen Kane, and The Wizard of Oz. Yes, Netflix now owns Casablanca and Citizen Kane. We bet that wasn’t on your 2025 bingo card.

Netflix co-CEO Ted Sarandos promises the acquisition will “create more [openings] for the creative community,” but Netflix’s track record tells a different story. The streaming giant has pioneered a compensation model that systemically underpays actors and writers, potentially setting a devastating precedent for how Warner Bros.’ talent will be treated.

The problem isn’t just low upfront salaries, it’s the evisceration of residuals — the payments actors receive when their work is aired or streamed. In traditional television, actors could rely on residual payments as shows enter syndication, providing steady income between jobs. Netflix’s model has essentially eliminated this revenue stream.

Despite being one of Netflix’s first major hits and helping establish the platform as a serious content creator, Orange Is the New Black actors were paid shockingly little, and receive almost nothing in residuals. Kimiko Glenn, who appeared in 44 episodes of the show as Brook Soso, famously revealed in a viral TikTok that her total foreign residuals amounted to just USD 27.3… for a show that Netflix bragged at one point had more viewers than HBO’s Game of Thrones. Emma Myles, who played Leanne Taylor across six seasons, told The New Yorker that she receives approximately USD 20 per year in residuals from the show, compared to around USD 600 annually for just four guest appearances on Law & Order: SVU.

Even as the show became a global phenomenon, Diane Guerrero tended bar, Emma Myles worked for a financial firm, and Lori Tan Chinn considered going on food stamps. Alysia Reiner, who played Natalie “Fig” Figueroa, told The New Yorker: “We all took a risk together, and the reward for Netflix does not seem in line with the reward for all of us who took that risk. I can go anywhere in the world and I'm recognized… Many people say they've watched the series multiple times, and they quote me my lines. But was I paid in a commensurate way? I don't think so.” Beth Dover added: “They're telling us, ‘Oh, we can't pay you this much, because we're pinching pennies.’ But then Netflix is telling their shareholders that they're making more than they've ever made” — with USD 82.7 bn to spare, it seems.

Even Breaking Bad star Aaron Paul has said that he “doesn’t get paid” by Netflix for his breakout and iconic role as Jesse Pinkman. Neither does the creator of Squid Game — which earned Netflix USD 900 mn — despite IP ownership.

This isn’t a bug in Netflix’s business model, it’s a feature. As Michael Schulman explained in The New Yorker, Netflix’s residuals “come from a portion of what [they] paid Lionsgate for the license fee to air Orange Is the New Black… it’s just a miniscule amount of money compared to what these actors have made on traditional broadcast and cable shows.” By structuring deals to minimize residuals, Netflix maximizes income for executives and shareholders, while creative talent struggles to make rent. Sarandos himself reportedly makes tens of mns annually, while actors from his platform’s hit shows work second jobs.

Warner Bros. is known for treating talent well and maintaining strong relationships with filmmakers. That reputation — and those relationships — are now at risk. Many A-list stars who will undoubtedly be compensated much more generously are SAG-AFTRA members that haven’t shied away from supporting writers and crewmembers on strikes related to fair compensation, and may refuse to work with a studio that will make for a poor custodian of the industry.

Opposition from within the industry has been swift. The Writers Guild of America has called for the deal to be blocked entirely, arguing that it would “eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers, and reduce the volume and diversity of content for all viewers,” with concerns voiced by the Directors Guild of America as well as the Producers Guild of America, asserting that “legacy studios are more than content libraries” to be bought.

The deal comes at a precarious moment for Hollywood, as CNN Business observes. The industry is “upset by rapidly changing consumer behavior,” with the industry’s default response to the crisis being consolidation. Disney bought Hulu, WarnerMedia merged with Discover, Paramount merged with Skydance. And each combination has brought layoffs, reduced job openings, and failed to deliver on promises or provide sustainable solutions. Canadian director Sasha Leigh Henry told CBC that the merger is a harbinger of “fewer options, fewer voices, and fewer decision makers coming from different perspectives... It feels like a bit of a limitation that we're gonna be experiencing in one way or another, whether that be the kinds of content or the breadth of the perspectives and filmmakers and the kinds of stories that we're being told.”

We may look back at 5 December 2025 as the day the movie industry died, not with a bang, but with a merger.

In tomorrow’s commute: The cultural cost of Netflix’s acquisition and what it means for the future of moviegoing.