$72B Streaming Deal: ETFs to Gain From Netflix's Warner Bros. Takeover

The streaming industry witnessed a major plot twist last week, with Netflix NFLX emerging victorious in a fierce bidding war to acquire the studio and streaming assets of Warner Bros. Discovery for an estimated $72 billion in equity value, or $82.7 billion in total enterprise value. This transaction, which includes the HBO Max streaming service, and legendary franchises from Harry Potter to Game of Thrones, can be expected to significantly reshape the entertainment landscape.

The deal is expected to strengthen Netflix's position as the global streaming leader, enhancing its long-term value. This anticipated uplift for the streaming giant is also likely to benefit exchange-traded funds (ETFs) with substantial Netflix exposure. Investors seeking to participate in this transformative deal while reducing single-stock risk may find these Netflix-weighted ETFs worth considering.

How Does the Deal Help Netflix?

Strategically, the Warner Bros agreement would instantly deepen Netflix’s content moat by adding a century-old studio catalog, globally recognized film and TV franchises, along with the HBO Max brands, enhancing its ability to attract and retain subscribers across the globe. 

This acquisition is fundamentally about Netflix securing unparalleled intellectual property (IP) and scaling its business for the long term. Analysts see the deal as creating a "streaming powerhouse" by combining Netflix's global platform with Warner Bros.' "phenomenal IP" that resonates worldwide. 

This immediate infusion of premium content is expected to attract and retain more subscribers and lower the reliance on costly original content production for core franchises. To this end, NFLX’s management has signaled scope to integrate or bundle services, keep theatrical releases, and target at least $2-$3 billion of annual cost synergies by the third year after closing. This, in turn, should boost the company’s profit margins and free cash flow in the long run. 

Once the takeover is completed, expected within the next 12-18 months, the combined entity will command a significantly larger share of the streaming market. This may allow Netflix to exert greater pricing power in the future, potentially accelerating its profitability for decades to come.

Why ETFs?

While the Warner Bros. acquisition promises a bright future for Netflix, investing in a single company always carries stock-specific risk. For instance, Netflix missed on its third-quarter 2025 earnings and revenues, which caused its share price to tank more than 10% in the following trading session — a drop largely attributed to an unexpected one-time tax charge. Such volatility underscores the danger of a single stock investment.

This is where ETFs shine. By holding a diversified basket of stocks, an ETF can offer exposure to Netflix's potential gains while cushioning the blow from any company-specific setbacks. Investors get the benefit of the acquisition-driven growth without tying their entire return to a single earnings report or any other event impacting NFLX.  If Netflix thrives, the ETF benefits; if it stumbles, the impact is cushioned by other holdings. 

The above discussion makes ETFs a powerful tool for investors who want to reap the benefits of the long-term profitability of NFLX, post-acquisition, but at a minimized risk.

Netflix-Heavy ETFs for Investors to Watch

Considering the discussion so far, investors may keep the following ETFs on their watchlists and invest if they see fit, as these funds offer substantial exposure to Netflix within a diversified portfolio.

First Trust Dow Jones Internet Index Fund FDN

This fund, with net assets of $6.88 billion, provides exposure to 41 companies within the broad internet industry. Of these, Netflix takes the third spot, accounting for an 8.27% share. E-commerce giant Amazon (AMZN) holds the first spot in this fund with 10.32% weightage, while Facebook-owner Meta Platforms (META) holds the second position with 9.28% weightage.

FDN has surged 12.3% year to date and charges 49 basis points (bps) in fees. Its volume is good at an average of 0.7 million shares a day. 

FT Vest Dow Jones Internet & Target Income ETF FDND

This is an actively managed fund, with net assets worth $10.3 million, which provides exposure to 42 companies, with the intention to offer investors current income with a secondary objective of providing capital appreciation. Of these, Netflix takes the third spot, accounting for an 8.23% share. AMZN holds the first spot in this fund with 10.27% weightage, while META holds the second position with 9.23% weightage.

FDND has gained 10.9% year to date and charges 75 bps in fees. Its volume is at an average of 3,993 shares a day.  

Communication Services Select Sector SPDR Fund XLC

This fund, with assets under management (AUM) worth $27.73 billion, provides exposure to 23 companies from the telecommunication services, media, entertainment and interactive media & services industries. Of these, Netflix takes the fifth spot, accounting for a 5.08% share, while Warner Bros. Discovery holds the fourth spot, holding 6.25% of shares. META holds the first spot in this fund, with 13.55% weightage. 

XLC has soared 22% year to date and charges 8 bps in fees. It traded in a heavy volume of around 6.05 million shares in the last trading session. 
 

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