Listen to this post:Good morning,This week’s Stratechery Interview is with Netflix co-CEO Greg Peters. Peters became co-CEO of Netflix in 2023, and was previously Chief Operating Officer and Chief Product Officer. I interviewed Peters in January 2024.Netflix reached all-time highs last summer, but is facing increased skepticism from Wall Street, particularly after the company announced its intention to acquire Warner Bros., which represented a stark departure from the company’s build-not-buy philosophy.In t ...

Core Viewpoint - Netflix is set to report its fourth-quarter earnings, with significant attention on its all-cash offer of $82.7 billion for Warner Bros. Discovery's streaming and studios division, amidst a challenging economic environment and investor concerns about growth projections [1][2][4]. Group 1: Earnings Report Expectations - The consensus expectation for Netflix's revenue is $12 billion, reflecting a 17% increase from the same quarter last year, with earnings projected to rise 28% to 55 cents per share [5]. - Analysts are particularly interested in Netflix executives' comments regarding the integration of Warner Bros.' operations and the company's ongoing initiatives in advertising and live events [5]. Group 2: Market Dynamics and Competition - Netflix shares have declined nearly 30% since the last quarterly earnings report, influenced by regulatory uncertainties and the company's pursuit of a major acquisition [4]. - Paramount has initiated a hostile, all-cash bid for Warner Bros. Discovery, indicating a competitive landscape in the media sector [2]. Group 3: Advertising and Subscriber Trends - A survey by TD Cowen revealed that 81% of advertisers plan to purchase ad time on Netflix in 2026, a significant increase from 54% the previous year, suggesting a positive outlook for Netflix's advertising tier [6]. - Netflix's ad tier has grown to 94 million monthly active users, up from 70 million in November 2024, indicating strong demand for its advertising services [6]. Group 4: International Growth and Content Strategy - Bernstein Research projects that Netflix will end 2025 with over 325 million subscribers, with a strategic focus on international markets driving growth [7]. - The company is increasingly leveraging international titles to enhance global engagement at a lower cost compared to U.S. English originals [7]. Group 5: Industry Context - The upcoming earnings report is part of a broader cycle of earnings for media and tech companies, as the industry navigates a consequential year for Hollywood [3]. - Despite the ongoing merger discussions, analysts believe that Netflix's fundamentals and organic growth strategies will be highlighted in the earnings report [8].