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Welcome to the big leagues, Netflix

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Welcome to the big leagues, Netflix

Warner Bros. has an infamous history of being bought by other companies and then quickly ending up back on the market after its new owners realize how difficult it is to capitalize on a legacy production studio’s assets. Those challenges are part of what doomed WB’s mergers with AOL and AT&T, who bought the studio in attempts to reinvent themselves. But WB’s latest acquisition deal — this time with Netflix for $83 billion — feels like it has the potential to turn out differently because of how much of a major player within the entertainment industry the streamer has become. It also signals just how far Netflix has come: in less than two decades the streamer has gone from tech upstart to subsuming one of the most storied studios in Hollywood.

Assuming that the deal receives regulatory approval, Netflix will soon own the entirety of Warner Bros.’ (but not Discovery Global’s) assets, which includes HBO / HBO Max, DC Studios, and the legacy studio’s television and film production arms. This would make Netflix the corporate home to many more of the world’s biggest entertainment franchises, like Game of Thrones and Harry Potter, and give the streamer a much larger operational footprint as a proper studio. Discovery Global — which retains ownership of networks including CNN, the Discovery Channel, and TLC — is set to become an independent corporate entity by Q3 in 2026.

This strategic bifurcation and sale of assets was obviously WBD’s desired outcome when the company first announced earlier this year that it planned to split Warner Bros. and Discovery back into two units. Back then, CEO David Zaslav had not yet announced that the company was open to acquisition offers. But you could glean as much from looking at the way that WBD was struggling to turn a profit with its linear cable networks.

Even though WBD managed to pay down a substantial portion of the $55 billion debt it inherited when Discovery bought WarnerMedia, the merged company’s flagging cable TV assets were a major factor in it receiving a significantly downgraded credit score earlier this year. That debt — a holdover from AOL’s disastrous merger with Time Warner — loomed over WBD for the entirety of Zaslav’s tenure as CEO.

A blend of money problems, misguided rebrands, and multiple rounds of layoffs left WBD in a very precarious position that made selling itself off to the highest bidder one of its only viable options to appease shareholders. Those challenges might also be difficult for Netflix to deal with, but this situation feels like it could shake out very differently for a handful of key reasons.

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Unlike previous mergers where Warner Bros. was gobbled up by traditional tech giants and telecoms, the new deal is coming at a time when Netflix has long since established itself as a Hollywood power player. In addition to acquiring IP that goes on to become hits, the streamer has built out a robust production infrastructure to spin up wholly original projects of its own. And with many of the platform’s subscriber-generating projects like Stranger Things and Squid Game coming to an end, it’s easy to understand why it wanted to scoop up Warner Bros.’ sizable library of films and series. Netflix doesn’t have the strongest track record of building its own franchises — remember Rebel Moon? — and that’s exactly what it’s getting with WB.

Though Netflix feels like a better acquisition partner compared to Warner Bros.’ previous owners, this is still a consolidation and these kinds of mergers always come with casualties. And it is likely that we will soon start hearing about layoffs as Netflix begins dealing with internal redundancies created by its absorption of Warner Bros.’ employees and operations. But what is much less clear is how the newly merged studio will go about releasing its new projects.

In 2021 during the covid-19 pandemic’s height, WBD’s decision to debut movies on HBO Max as opposed to theaters prompted directors like Christopher Nolan to denounce the company for becoming “the worst streaming service.” Though box office numbers still haven’t returned to pre-pandemic levels, theaters have reopened, and breakout hits like Warner Bros.’ A Minecraft Movie and Superman features have made it clear that there is a demand to see movies on the big screen. Netflix has experimented with very limited theatrical releases that transparently read as plays to qualify its movies for major industry awards. But it has still primarily been a streaming company in the years since it got out of the DVD game.

Unlike MGM, which was on the decline when Amazon bought it, Warner Bros. has had a very strong track record with its recent theatrical releases. Netflix has said that it “expects” to keep putting Warner Bros.’ movies in theaters, but co-CEO Ted Sarandos has signaled that the company is thinking about shortening its theatrical windows in order to “meet the audience where they are quicker.”

“I’d say right now, you should count on everything that is planned on going to the theater through Warner Bros. will continue to go to the theaters through Warner Bros. and Netflix movies will take the same strides they have,” Sarandos said this week in a call with industry analysts.

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Netflix has also made abundantly clear that it is open to cutting production costs by using generative AI. The company has not mandated that its collaborators use the technology as part of their production workflows, but it is easy to imagine gen AI becoming a bigger part of the studio now that it has taken on all of the projects Warner Bros. has in development.

The more glaring concern to come out of the new merger is the way that this could impact competition between the major studios and streaming platforms. Netflix has effectively replaced Warner Bros. as one of the Big Five, which will likely change the entertainment industry’s power dynamics. But streaming customers will probably feel these shifts more directly as Netflix and its competitors settle into a new status quo.

Netflix’s prices could go up yet again under the auspice that the service has become more premium with Warner Bros.’ offerings. It’s still not clear how Netflix will handle the HBO / Max brands long term. The company has said that it thinks “HBO and HBO Max also provide a compelling, complementary offering for consumers,” but it would not be surprising to see those brands ultimately going the way of Hulu, which has been turned into a section within Disney Plus.

It has been years since Netflix was a rowdy upstart fighting to be taken seriously. But even though the company has already cemented itself as the world’s biggest TV / movie streamer, this new deal will take it to a different level of prominence. The Netflix / WBD merger will undoubtedly result in changes — some of them bad — that reverberate through the entire entertainment landscape.

But as tumultuous as things will likely feel in the immediate future, it doesn’t seem likely that Netflix will end up trying to sell off Warner Bros. in a couple of years. Acquisitions of this scale aren’t the company’s usual MO, but it has been bullish about wanting Warner Bros. since the studio went on sale. If the deal goes through, Netflix is undoubtedly in the big leagues — now it has to prove it belongs.

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Republicans attack ‘woke’ Netflix — and ignore YouTube

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Republicans attack ‘woke’ Netflix — and ignore YouTube

When Netflix co-CEO Ted Sarandos entered the Senate office building on Tuesday, he got thrown a curveball. What started as a standard antitrust hearing relating to the Warner Bros. merger quickly devolved into a performative Republican attack about the spread of “woke” ideology on the streaming service. At the same time, arguably a much more influential platform was completely ignored: YouTube.

After grilling Sarandos about residual payments, Sen. Josh Hawley (R-MO) launched into a completely different line of questioning: “Why is it that so much of Netflix content for children promotes a transgender ideology?” Hawley asked, making an unsubstantiated claim that “almost half” of the platform’s children’s content contains so-called “transgender ideology.” The statement harkened to a pressure campaign launched by Elon Musk months ago in which he called on X users to unsubscribe from Netflix for having a “transgender woke agenda,” citing its few shows with trans characters — shows that were canceled years ago.

“Our business intent is to entertain the world,” Sarandos replied. “It is not to have a political agenda.” Still, other Republican lawmakers, including Sens. Ashley Moody (R-FL) and Eric Schmitt (R-MO), piled on, bringing up a post Netflix made following the murder of George Floyd, and the French film Cuties, which sparked a right-wing firestorm years ago. Sen. Ted Cruz (R-TX) even asked Sarandos what he thought about Billie Eilish’s “no one is illegal on stolen land” comment at the Grammys. It seemed like they were grasping at straws to support their narrative that Netflix’s acquisition of Warner Bros. could somehow poison the well of content for viewers.

“My concern is that you don’t share my values or those of many other American parents, and you want the United States government to allow you to become one of the largest — if not the largest — streaming monopolist in the world,” Hawley said. “I think we ought to be concerned about what content you’re promoting.”

While it’s true that Netflix will control a substantial portion of the streaming market when — and or if — it acquires Warner Bros. and its streaming service HBO Max, it’s hard to criticize Netflix without bringing up YouTube.

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“YouTube is not just cat videos anymore. YouTube is TV.”

For years now, Netflix has been trying to topple YouTube as the most-watched streaming service. Data from Nielsen says Netflix made up 9 percent of total TV and streaming viewing in the US in December 2025, while Warner Bros. Discovery’s services made up 1.4 percent. Combining the two doesn’t even stack up to YouTube, which held a 12.7 percent share of viewership during that time. “YouTube is not just cat videos anymore,” Sarandos told the subcommittee. “YouTube is TV.”

Unlike Netflix, YouTube is free and has an ever-growing library of user-created content that doesn’t require it to spend billions of dollars in production costs and licensing fees. YouTube doesn’t have to worry about maintaining subscribers, as anyone with access to a web browser or phone can open up and watch YouTube. The setup brings YouTube a constant stream of viewers that it can rope in with a slew of content it can recommend to watch next.

But not all creators on YouTube are striving for quality. As my colleague Mia Sato wrote, YouTube is home to creators who try to feed an algorithm that boosts inflammatory content and attempts to hook viewers, in addition to an array of videos that may be less than ideal for kids.

Like it or not, YouTube is the dominant streamer, with an endless supply of potentially offensive agendas for just about anyone. But for some reason, it’s not the target of this culture war. If these lawmakers actually cared about what their kids are watching, maybe they’d start looking more closely at how YouTube prioritizes content. Or, if they don’t like the shows and movies on Netflix, they could just do what Sarandos suggested during the hearing: unsubscribe.

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Microsoft crosses privacy line few expected

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Microsoft crosses privacy line few expected

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For years, we’ve been told that encryption is the gold standard for digital privacy. If data is encrypted, it is supposed to be locked away from hackers, companies and governments alike. That assumption just took a hit. 

In a federal investigation tied to alleged COVID-19 unemployment fraud in Guam, a U.S. territory where federal law applies, Microsoft confirmed it provided law enforcement with BitLocker recovery keys. Those keys allowed investigators to unlock encrypted data on multiple laptops.

This is one of the clearest public examples to date of Microsoft providing BitLocker recovery keys to authorities as part of a criminal investigation. While the warrant itself may have been lawful, the implications stretch far beyond one investigation. For everyday Americans, this is a clear signal that “encrypted” does not always mean “inaccessible.”

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HACKERS ABUSE GOOGLE CLOUD TO SEND TRUSTED PHISHING EMAILS

In the Guam investigation, Microsoft provided BitLocker recovery keys that allowed law enforcement to unlock encrypted laptops. (David Paul Morris/Bloomberg via Getty Images)

What happened in the Guam BitLocker case?

Federal investigators believed three Windows laptops held evidence tied to an alleged scheme involving pandemic unemployment funds. The devices were protected with BitLocker, Microsoft’s built-in disk encryption tool enabled by default on many modern Windows PCs. BitLocker works by scrambling all data on a hard drive so it cannot be read without a recovery key. 

Users can store that key themselves, but Microsoft also encourages backing it up to a Microsoft account for convenience. In this case, that convenience mattered. When served with a valid search warrant, Microsoft provided the recovery keys to investigators. That allowed full access to the data stored on the devices. Microsoft says it receives roughly 20 such requests per year and can only comply when users have chosen to store their keys in the cloud.

We reached out to Microsoft for comment, but did not hear back before our deadline.

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How Microsoft was able to unlock encrypted data

According to John Ackerly, CEO and co-founder of Virtru and a former White House technology advisor, the problem is not encryption itself. The real issue is who controls the keys. He begins by explaining how convenience can quietly shift control. “Microsoft commonly recommends that users back up BitLocker recovery keys to a Microsoft account for convenience. That choice means Microsoft may retain the technical ability to unlock a customer’s device. When a third party holds both encrypted data and the keys required to decrypt it, control is no longer exclusive.”

Once a provider has the ability to unlock data, that power rarely stays theoretical. “When systems are built so that providers can be compelled to unlock customer data, lawful access becomes a standing feature. It is important to remember that encryption does not distinguish between authorized and unauthorized access. Any system designed to be unlocked on demand will eventually be unlocked by unintended parties.”

Ackerly then points out that this outcome is not inevitable. Other companies have made different architectural choices. “Other large technology companies have demonstrated that a different approach is possible. Apple has designed systems that limit its own ability to access customer data, even when doing so would ease compliance with government demands. Google offers client-side encryption models that allow users to retain exclusive control of encryption keys. These companies still comply with the law, but when they do not hold the keys, they cannot unlock the data. That is not obstruction. It is a design choice.”

Finally, he argues that Microsoft still has room to change course. “Microsoft has an opportunity to address this by making customer-controlled keys the default and by designing recovery mechanisms that do not place decryption authority in Microsoft’s hands. True personal data sovereignty requires systems that make compelled access technically impossible, not merely contractually discouraged.”

In short, Microsoft could comply because it had the technical ability to do so. That single design decision is what turned encrypted data into accessible data.

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“With BitLocker, customers can choose to store their encryption keys locally, in a location inaccessible to Microsoft, or in Microsoft’s consumer cloud services,” a Microsoft spokesperson told CyberGuy in a statement. “We recognize that some customers prefer Microsoft’s cloud storage, so we can help recover their encryption key if needed. While key recovery offers convenience, it also carries a risk of unwanted access, so Microsoft believes customers are in the best position to decide whether to use key escrow and how to manage their keys.”

WHY CLICKING THE WRONG COPILOT LINK COULD PUT YOUR DATA AT RISK

When companies hold encryption keys, lawful requests can unlock far more data than most people expect. (Kurt “CyberGuy” Knutsson)

Why this matters for data privacy

This case has reignited a long-running debate over lawful access versus systemic risk. Ackerly warns that centralized control has a long and troubling history. “We have seen the consequences of this design pattern for more than two decades. From the Equifax breach, which exposed the financial identities of nearly half the U.S. population, to repeated leaks of sensitive communications and health data during the COVID era, the pattern is consistent: centralized systems that retain control over customer data become systemic points of failure. These incidents are not anomalies. They reflect a persistent architectural flaw.”

When companies hold the keys, they become targets. That includes hackers, foreign governments and legal demands from agencies like the FBI. Once a capability exists, it rarely goes unused.

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How other tech giants handle encryption differently

Apple has designed systems, such as Advanced Data Protection, where it cannot access certain encrypted user data even when served with government requests. Google offers client-side encryption for some services, primarily in enterprise environments, where encryption keys remain under the customer’s control. These companies still comply with the law, but in those cases, they do not possess the technical means to unlock the data. That distinction matters. As encryption experts often note, you cannot hand over what you do not have.

What we can do to protect our privacy

The good news is that personal privacy is not gone. The bad news is that it now requires intention. Small choices matter more than most people realize. Ackerly says the starting point is understanding control. “The main takeaway for everyday users is simple: if you don’t control your encryption keys, you don’t fully control your data.”

That control begins with knowing where your keys are stored. “The first step is understanding where your encryption keys live. If they’re stored in the cloud with your provider, your data can be accessed without your knowledge.”

Once keys live outside your control, access becomes possible without your consent. That is why the way data is encrypted matters just as much as whether it is encrypted. “Consumers should look for tools and services that encrypt data before it reaches the cloud — that way, it is impossible for your provider to hand over your data. They don’t have the keys.” Defaults are another hidden risk. Many people never change them. “Users should also look to avoid default settings designed for convenience. Default settings matter, and when convenience is the default, most individuals will unknowingly trade control for ease of use.”

When encryption is designed so that even the provider cannot access the data, the balance shifts back to the individual. “When data is encrypted in a way that even the provider can’t access, it stays private — even if a third party comes asking. By holding your own encryption keys, you’re eliminating the possibility of the provider sharing your data.” Ackerly says the lesson is simple but often ignored. “The lesson is straightforward: you cannot outsource responsibility for your sensitive data and assume that third parties will always act in your best interest. Encryption only fulfills its purpose when the data owner is the sole party capable of unlocking it.” Privacy still exists. It just no longer comes by default.

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Reviewing default security and backup settings can help you keep control of your private data. (Kurt “CyberGuy” Knutsson)

Practical steps you can take today

You do not need to be a security expert to protect your data. A few practical checks can go a long way.

1) Start by checking where your encryption keys live

Many people do not realize that their devices quietly back up recovery keys to the cloud. On a Windows PC, sign in to your Microsoft account and look under device security or recovery key settings. Seeing a BitLocker recovery key listed online means it is stored with Microsoft. 

For other encrypted services, such as Apple iCloud backups or Google Drive, open your account security dashboard and review encryption or recovery options. Focus on settings tied to recovery keys, backup encryption, or account-based access. When those keys are linked to an online account, your provider may be able to access them. The goal is simple. Know whether your keys live with you or with a company.

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2) Avoid cloud-based key backups unless you truly need them

Cloud backups are designed for convenience, not privacy. If possible, store recovery keys offline. That can mean saving them to a USB drive, printing them and storing them in a safe place, or using encrypted hardware you control. The exact method matters less than who has access. If a company does not have your keys, it cannot be forced to turn them over.

3) Choose services that encrypt data before it reaches the cloud

Not all encryption works the same way, even if companies use similar language. Look for services that advertise end-to-end or client-side encryption, such as Signal for messages, or Apple’s Advanced Data Protection option for iCloud backups. These services encrypt your data on your device before it is uploaded, which means the provider cannot read it or unlock it later. Here is a simple rule of thumb. If a service can reset your password and restore all your data without your involvement, it likely holds the encryption keys. That also means it could be forced to hand over access. When encryption happens on your device first, providers cannot unlock your data because they never had the keys to begin with. That design choice blocks third-party access by default.

4) Review default security settings on every new device

Default settings usually favor convenience. That can mean easier recovery, faster syncing and weaker privacy. Take five minutes after setup and lock down the basics.

iPhone: tighten iCloud and account recovery

Turn on Advanced Data Protection for iCloud (strongest iCloud protection)

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  • Open Settings
  • Tap your name
  • Tap iCloud
  • Scroll down and tap Advanced Data Protection
  • Tap Turn On Advanced Data Protection
  • Follow the prompts to set up Account Recovery options, like a Recovery Contact or Recovery Key

Review iCloud Backup

  • Open Settings
  • Tap your name
  • Tap iCloud
  • Tap iCloud Backup
  • Decide if you want it on or off, based on your privacy comfort level

Strengthen your Apple ID security

  • Open Settings
  • Tap your name
  • Tap Sign-In & Security
  • Make sure Two-Factor Authentication (2FA) is turned on and review trusted phone numbers and devices
  • Review trusted phone numbers and devices

Android: lock your Google account and backups

Review and control device backup

Settings may vary depending on your Android phone’s manufacturer.

  • Open Settings
  • Tap Google
  • Tap Backup (or All services then Backup)
  • Tap Manage backup
  • Choose what backs up and confirm which Google account stores it

NEW ANDROID MALWARE CAN EMPTY YOUR BANK ACCOUNT IN SECONDS

Strengthen your screen lock, since it protects the device itself

Settings may vary depending on your Android phone’s manufacturer.

  • Open Settings
  • Tap Security or Security & privacy
  • Set a strong PIN or password
  • Turn on biometrics if you want, but keep the PIN strong either way

Secure your Google account

Settings may vary depending on your Android phone’s manufacturer.

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  • Open Settings
  • Tap Google
  • Tap Manage your Google Account
  • Go to Security
  • Turn on 2-Step Verification and review recent security activity

Mac: enable FileVault and review iCloud settings

Turn on FileVault disk encryption

  • Click the Apple menu
  • Select System Settings
  • Click Privacy & Security
  • Scroll down and click FileVault
  • Click Turn On
  • Save your recovery method securely

Review iCloud syncing

  • Open System Settings
  • Click your name
  • Click iCloud
  • Review what apps and data types sync
  • Turn off anything you do not want stored in the cloud

Windows PC: check BitLocker and where the recovery key is stored

Confirm BitLocker status and settings

  • Open Settings
  • Go to Privacy & security
  • Tap Device encryption or BitLocker (wording varies by device)

Check whether your BitLocker recovery key is stored in your Microsoft account

  • Go to your Microsoft account page
  • Open Devices
  • Select your PC
  • Look for Manage recovery keys or a BitLocker recovery key entry
  • If you see a key listed online, it means the key is stored with Microsoft. That is why Microsoft was able to provide keys in the Guam case.

If your account can recover everything with a few clicks, a third party might be able to recover it too. Convenience can be helpful, but it can also widen access.

5) Treat convenience features as privacy tradeoffs

Every shortcut comes with a cost. Before enabling a feature that promises easy recovery or quick access, pause and ask one question. If I lose control of this account, who else gains access? If the answer includes a company or third party, decide whether the convenience is worth it. 

These steps are not extreme or technical. They are everyday habits. In a world where lawful access can quietly become routine access, small choices now can protect your privacy later.

Strengthen protection beyond encryption

Encryption controls who can access your data, but it does not stop every real-world threat. Once data is exposed, different protections matter.

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Strong antivirus software adds device-level protection

Strong antivirus software helps block malware, spyware and credential-stealing attacks that can bypass privacy settings altogether. Even encrypted devices are vulnerable if malicious software gains control before encryption comes into play.

The best way to safeguard yourself from malicious links that install malware, potentially accessing your private information, is to have strong antivirus software installed on all your devices. This protection can also alert you to phishing emails and ransomware scams, keeping your personal information and digital assets safe.

Get my picks for the best 2026 antivirus protection winners for your Windows, Mac, Android and iOS devices at Cyberguy.com

An identity theft protection service helps when exposure turns into fraud

If personal data is accessed, sold, or misused, identity protection services can monitor for suspicious activity, alert you early and help lock down accounts before damage spreads. Identity Theft companies can monitor personal information like your Social Security Number (SSN), phone number and email address, and alert you if it is being sold on the dark web or being used to open an account. They can also assist you in freezing your bank and credit card accounts to prevent further unauthorized use by criminals.

See my tips and best picks on how to protect yourself from identity theft at Cyberguy.com.

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Kurt’s key takeaways

Microsoft’s decision to comply with the BitLocker warrant may have been legal. That doesn’t make it harmless. This case exposes a hard truth about modern encryption. Privacy depends less on the math and more on how systems are built. When companies hold the keys, the risk falls on the rest of us.

Do you trust tech companies to protect your encrypted data, or do you think that responsibility should fall entirely on you? Let us know by writing to us at Cyberguy.com.

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Substack data breach exposed users’ emails and phone numbers

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Substack data breach exposed users’ emails and phone numbers

Substack is notifying some users that the email addresses and phone numbers linked to their accounts were exposed in a “security incident” last year. In an email to account holders, Substack CEO Chris Best said that a hacker had accessed internal data without authorization in October 2025, but that passwords, credit card numbers, and other financial information remain secure.

“On February 3rd, we identified evidence of a problem with our systems that allowed an unauthorized third party to access limited user data without permission, including email addresses, phone numbers, and other internal metadata,” Best said in the email. “We do not have evidence that this information is being misused, but we encourage you to take extra caution with any emails or text messages you receive that may be suspicious.”

Substack says that it has since fixed the security problem, and is now conducting a full investigation alongside bolstering its systems “to prevent this type of issue from happening in the future.” The platform didn’t provide any details regarding what the security issue was, or how many users have been impacted — myself and several Verge colleagues who also use Substack did not receive the email. We have reached out to Substack for clarification.

“I’m incredibly sorry this happened,” Best said in the email to users. “We take our responsibility to protect your data and your privacy seriously, and we came up short here.”

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