Netflix CEO Ted Sarandos reveals where he sees the biggest value in monster Warner Bros. deal

The latest 4th from Netflix (NFLX) near Wall Street wanting more, and not conscionable connected the net front.

Shares of Netflix tanked 6% successful premarket trading connected Wednesday arsenic its archetypal outlook for 2026 fell shy of expert forecasts. Netflix sees 2026 income maturation of 12% to 14%, abbreviated of the "whisper numbers" of 16% that circulated up of the report.

The institution besides earmarked $275 cardinal successful costs related to the $72 cardinal acquisition of Warner Bros. Discovery (WBD), impacting operating borderline potential.

Adding to the database of concerns, Netflix said viewing hours successful the 2nd fractional of 2025 lone accrued 2% — good beneath the afloat twelvemonth maturation complaint of 9%. Moreover, with 325 cardinal subscribers, Netflix trailed immoderate expert estimates connected this cardinal metric.

"We stay acrophobic that short-form amusement (such arsenic TikTok, Insta, X, YouTube shorts and Snap) is doing to streaming what streaming has done to accepted TV arsenic consumers (especially younger ones) walk an ever expanding clip connected these platforms amidst plummeting attraction spans," said Guggenheim expert Jeff Wlodarczak.

He noted this displacement is "fundamentally antagonistic for long-form content."

Wlodarczak added that helium remains acrophobic the bidding warfare for WBD betwixt Netflix and Paramount is not over, and that the "expensive" woody could beryllium to beryllium a distraction arsenic contented contention intensifies.

He isn't unsocial connected the Street successful his worries regarding Netflix's erstwhile maturation trajectory.

"We judge nuances astir engagement, incremental investment, and uncertainty connected Warner are apt to measurement connected the banal NT," KeyBanc expert Justin Patterson said.

On the net call, Netflix co-CEO Ted Sarandos revealed his reasoning down the splashy $72 cardinal woody for Warner Bros. While the mentation was apt welcomed by the Street, it fell good abbreviated of providing important details connected integration readying and the eventual fiscal interaction of acquiring specified a monolithic bequest media asset.

In short, the telephone did small to alleviate capitalist concerns regarding Netflix's shares successful 2026.

On the net call, Netflix co-CEO Ted Sarandos defended the $72 cardinal Warner Bros. Discovery acquisition arsenic a indispensable improvement successful a "blurred" media landscape.

Sarandos connected the radical astatine Warner Bros. that helium needs:

"We're assured we're going to beryllium capable to unafraid each the approvals due to the fact that this woody is pro-consumer, it is pro-innovation, it's pro-worker, it is pro-creator and it is pro-growth. Warner Bros., arsenic we conscionable said earlier, it's got 3 halfway businesses that we don't presently have. So we're going to request those teams. These folks person extended acquisition and expertise. We privation them to enactment connected and tally those businesses. So we're expanding contented creation, not collapsing it. In this transaction, this is going to let america to importantly grow our accumulation capableness successful the U.S. and to support investing successful archetypal contented implicit the agelong term, which means much opportunities for originative endowment and much jobs. This is truly a vertical woody for us. It allows america to summation entree to 100 years of Warner Bros. heavy contented and IP for improvement and organisation successful much effectual ways that volition payment consumers and the manufacture arsenic a whole. HBO, arsenic Greg [co-CEO Greg Peters] conscionable mentioned, is simply a precise complementary work to ours. And the TV marketplace is highly dynamic and precise competitive. So the TV landscape, successful fact, has ne'er been much competitory than it is today. There's ne'er been much contention for creators, for user attention, for advertizing and subscription dollars.