Netflix warns it is under threat of Instagram, TikTok, YouTube as it chases Warner Bros
Also: Canadians embrace Heated Rivalry
Four times a year Netflix has the potential to radically alter the market with a quarterly revenue earning. Analysts look to the growth of Netflix as an indicator of the health of the broader streaming media industry. We have seen what happens when Netflix doesn’t meet expectations.
Todays quarterly earnings report had an air of significant importance around it. We knew going into it that Netflix would be using its Q4 earnings report to set the agenda heading into the Warner Bros Discovery shareholder vote on whether to accept the Netflix purchase deal. A position of strength and growth keeps skeptical investors calm amid uncertainty about the investment in Warner Bros.
The story Netflix had to tell today has the potential to radically reshape Hollywood. No pressure.
As far as storytelling goes, Netflix delivered one heck of a positive tale.
It beat revenue expectations. Revenue was up 17.6% from Q4 2024. It had anticipated $11.96 billion in revenue, but delivered $12.157 billion.
Across 2025 advertising revenue passed $1.5 billion. That’s 2.5 times 2024 revenue.
Total viewing was up 2% over the same period in 2024.
It plans to boost content spending by 10% to $20 billion in 2026.
It passed 325 million subscribers. Netflix had said previously that it wouldn’t report subscriber numbers outside of milestone events.
Read more: THR | Deadline | Variety
The narrative setting then came after the results were delivered. In a call with analysts after, Co-CEO Ted Sarandos was keen to embed the idea that Netflix isn’t as dominant as the perception may suggest. It’s the narrative that Sarandos and co will push on hard as Netflix gears up for any potential pushback to the WB deal from regulators in the US and abroad. As per THR:
“The TV landscape, in fact, has never been more competitive than it is today. There’s never been more competition for creators, for consumer attention, for advertising and subscription dollars,” Sarandos said on Netflix’s earnings call. “The competitive lines around TV consumption are already blurring as a number of services put their content on both the linear channels and the streaming services at the same time, and more platforms are making their way into the TV in your living room.”
“TV is not what we grew up on. TV is now just about everything,” he added. “The Oscars and the NFL are on YouTube. Networks are simulcasting the Super Bowl on linear TV and streaming. Amazon owns MGM, Apple is competing for Emmys and Oscars, and Instagram is coming next.”
“YouTube is not just UGC and cat videos anymore. YouTube has full length films, new episodes of scripted and unscripted TV shows. They have NFL football games. They have the Oscars. The BBC is going to be producing original content for YouTube soon. They are TV,” Sarandos said Tuesday. “So we all compete with them in every dimension, for talent, for ad dollars, for subscription dollars, and for all forms of content.”
Sarandos also spoke about previous consideration Netflix gave to the idea of getting into theatrical distribution. As per Variety:
“We were not in the theatrical business when I made those observations,” Sarandos said on the call Tuesday. “Remember, I’ve said it many times, this is a business, not a religion. So conditions change. Insights change. And we have a culture that we reevaluate things when they do.” He called out Netflix’s “pivots” around advertising, sports rights and live events — areas where the company had previously said it had no interest.
In theatrical, “we debated many times over the years whether we should build a theatrical distribution engine or not,” Sarandos said. “And in a world of priority-setting and constrained resources it just didn’t make the priority cut.”
When the WB deal closes, he said, “We will have the benefit of a scaled, world-class theatrical distribution business with more than $4 billion of global box office. And we’re excited to maintain it and further strengthen that business.”
“This is a business, not a religion,” is something I think belongs on a t-shirt. It’s also something a lot of people should keep in mind while discussing the future of what Netflix will and will not do should they be able to move ahead with the WB purchase.
The other Co-CEO, Greg Peters, also spoke on the earnings call and revealed plans to update the Netflix mobile UI to “better serve the expansion of our business over the decade to come.” Expect vertical video.
“You can imagine us bringing more clips based on new content types, like video podcasts, which Ted [Sarandos] mentioned that we’re adding to the general service. We’ll bring the sort of appropriate components of that into that vertical video feed,” Peters said.
Related:
Earlier in the day, Netflix confirmed reports that it would change its $82.7 billion bid to buy Warner Bros to an all-cash offer, replacing the previous offer which was a mix of shares and cash. It removes some of the uncertainty in the deal, which Paramount had been talking up as it sought to undermine the board-approved merger ahead of the shareholder vote.
WBD also chimed in with details on the value it places on the Discovery Global company, which is comprised of the assets Netflix isn’t interested in acquiring.
As per Deadline:
WBD today gave a price to the spinoff Discovery Global after advisors applied three different metrics. The first values the company at a low of $1.33 per share and a high of $3.24. Should Discovery Global become involved in a “potential future transaction,” this could rise to as much as $6.86, per a proxy filing made in the past few hours.
Related: According to an SEC filing, CNN reported an operating profit of $600 million, which is down from almost $1 billion a decade ago. While WBD doesn’t break out financials for CNN, it disclosed an expectation that CNN would generate revenue of $1.8 billion in 2026, rising by $100 million every year to reach $2.2 billion by 2030. That nutso figure is based on the idea that CNN’s direct to consumer streaming product takes off, which, based on what we have seen of it so far, seems wildly ambitious.
Read more: Variety
Homegrown Canadian support for Heated Rivalry
With ice hockey a national pastime for the good people of Canada, it is interesting to read about the incredible enthusiasm for the success of Heated Rivalry.
In an opinion piece at The Guardian, Sue Carter gets at the irony of this support:
My experiences are not unique in a country with a 95-year-old broadcast institution called Hockey Night in Canada. Rachel Reid, the Nova Scotian author of the queer hockey romance Heated Rivalry, grew up a hockey fanatic, more interested in playing the game than ogling boys. Jacob Tierney, who wrote and directed the TV adaptation of Reid’s 2019 bestseller, was raised in Montreal, where the Canadiens (or the Habs, as the team is affectionately known) are considered sacred.
This is not to romanticise a sport fraught with a history of racism, misogyny and homophobia. In July last year, six months before Heated Rivalry aired and became a cultural juggernaut, five junior hockey players were acquitted of sexual assault. And there still isn’t an openly gay player in the National Hockey League (NHL). The NHL released an innocuous statement acknowledging the show’s popularity but not the issues it addresses: “There are so many ways to get hooked on hockey and, in the NHL’s 108-year history, this might be the most unique driver for creating new fans. See you all at the rink.”
News Desk
TCL has entered the big leagues with a new joint venture announced by Sony that will see the Japanese tech giant spin-off its TV hardware business. The Sony and Bravia brands will still be retained. Read: The Verge
Netflix has announced its cast for the upcoming drama series Kennedy, which takes a The Queen-style look at the Kennedy family starting in the 1930s. We knew Michael Fassbender was in the cast, but announced are Laura Donnelly and Nick Robinson, alongside newcomer Joshuah Melnick. Among the supporting cast announced are Ben Miles and Imogen Poots. Read: Deadline
The bizarre Netflix Is a Joke festival is back for another year with the very impressive lineup announced today. Bizarre only because so little of the live comedy festival is recorded for consumption/distribution on Netflix. And yet, I will be able to watch a guy climb a building live on Saturday. Read: THR
The Wizard of Oz at the Sphere has now passed $260m in ticket sales. Read: THR
McG will direct the first episode of the new Baywatch reboot show. Read: Deadline
A Sports Illustrated FAST channel will launch on Amazon FireTV, DIRECTV, Sling Freestream, Anoki LiveTVx, Plex, LocalNow, Sports.tv, Tablo TV, DistroTV, Free Live Sports and launching soon on The Roku Channel. Read: TV Tech
The Martin Short documentary Marty, Life is Short will debut on Netflix in May. It is directed by Lawrence Kasdan who worked with Martin on an under-seen charmer of a film called Mumford back in 1999. Read: THR
Paramount shows SEAL Team, Watson, and Mayor of Kingstown are being licensed by Netflix to add to the service in the US. Read: Deadline
Trailer Park
Bait debuts on Prime Video March 25.
"Bait" stars Ahmed as Shah Latif, a struggling actor, whose last chance to hit it big comes in the form of an audition of a lifetime.
Australia’s Greatest Conman debuts on SBS On Demand Feb 24.
In the 1980s, John Friedrich led an elite sea and land rescue squad out of Victoria, winning an Order of Australia, top-secret government contracts, and hundreds of millions of dollars in loans. But no one knew that John Friedrich was not who he made out to be, and his undoing revealed one of the most audacious scams in Australian history – an estimated $900 million in today’s value.
The Last Thing He Told Me returns for season 2 on Apple TV Feb 20.
Straight To Hell debuts on Netflix April 27.
Kazuko Hosoki was a legendary fortune-teller who captivated Japan. What was the true nature of the woman who manipulated the media and achieved wild popularity?
House of Villains returns for season 3 on Peacock Feb 26.
That’s the newsletter for the today.
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