Apple may be the biggest loser in the Netflix-Warner Bros deal

On Friday, Netflix announced that it had agreed to acquire Warner Bros. in a deal worth a staggering $82.7 billion. The acquisition means Netflix will own Warner Bros’ entire library and production studios, as well as HBO and HBO Max. In short, these are Batman, Harry Potter, Superman and Scooby Doo, as well as many other well-known characters. Netflix will have one of, if not the largest libraries of any video streaming service. This also means that Netflix has become a giant competitor to Apple TV.

The acquisition could also directly affect Apple TV content. Apple produces some shows, but many shows on Apple TV are produced by other studios, including Warner Bros, which notably produces Ted Lasso And Contraction. For now, these two shows and every other Warner Bros-produced show on Apple TV will likely stay there, at least until each show’s license expires. When that happens, it might be in Netflix’s best interest not to renew the license with Apple so it can move the shows to its own service.

This could also mean that Apple will no longer license future content from Warner Bros. The announcement implies that Netflix and Warner Bros studios will merge into a single unit, which could mean that everything that studio produces will be made for the Netflix service. It could license shows it no longer wishes to be associated with for whatever reason – a rare occurrence that is an exception to the business model. In any case, Apple can no longer count on a large studio for content.

Apple’s efforts in live sports broadcasting could also have consequences. HBO Max has been a major player in the live sports space, with deals with NASCAR, US Soccer, NCAA March Madness and Banana Ball, while Netflix recently began streaming live boxing matches and, starting next year, will exclusively broadcast the MLB Home Run Derby and several high-profile games. Even though Apple TV offers MLS and F1, one of the biggest concerns when it comes to sports coverage is user access: Netflix’s subscriber base is several times larger than Apple TV’s. Netflix’s viewership numbers might be impossible to surpass, no matter how much Apple offers for the rights.

In October, Bloomberg reported on the Warner Bros. tender and cited unnamed sources who said Apple had “expressed interest,” although it’s unclear how far Apple got in its bid. While this seems like a missed opportunity to make Apple TV a bigger and better service, it also provides insight into how the company views the service.

Netflix paid a huge amount for HBO. Although its Services division has generated growing revenue for several consecutive quarters, Apple considers its hardware its priority, and Apple TV is an ancillary product that continues to be a minor player in the streaming services market.