Sarandos & Peters allay fears about proposed WBD acquisition at UBS Global TMT Conference

MUMBAI: Netflix is betting the house on Hollywood heritage. At the UBS Global TMT conference on 8 December 2025, co-chief executives Theodore Sarandos and Gregory K. Peters unveiled their audacious plan to acquire Warner Bros Discovery, creating a content colossus with $30bn in annual spending—dwarfing every rival in the entertainment universe.

The deal, which Paramount’s Skydance immediately tried to gatecrash with a rival bid, promises something radical: Netflix keeping Warner Bros’ theatrical releases exactly as they are. “We didn’t buy this company to destroy that value,” declared  Sarandos, channeling more preservation society than streaming disruptor. Films like Minecraft, Superman and Sinners would still debut in cinemas before landing on Netflix—a striking concession from a company that once treated theatres like analogue relics.

The numbers tell a fascinating story of scale and modesty combined. According to Nielsen data presented at the conference, Netflix commands just eight per cent of US television viewing hours, trailing YouTube’s 13 per cent. Add Warner Bros Discovery’s Max service, and that figure barely budges to nine per cent—hardly monopolistic territory.

“We’re still behind what Paramount combined with WBD would be at 14 per cent,” noted Peters, making the case that regulators should wave this through without breaking stride.

But the real intrigue lies in what Netflix isn’t planning to do. Whilst rivals slash content budgets and sack thousands, Netflix intends to keep Warner Bros’ three distinct businesses—theatrical studio, television production for third parties, and HBO’s prestige brand—operating largely as is.
 

“No redundancies currently,” stressed Peters. The company frames this as job creation, not the usual merger math of synergies through surgery. Sarandos took a pointed swipe at Paramount’s competing bid, which promised $6 billion in synergies: “Where do you think synergies come from? Cutting jobs.”

HBO will get particularly special treatment. Rather than force-feeding it into Netflix’s general entertainment maw, the plan is to let it double down on prestige television. “They have been doing gymnastics to make themselves into a general entertainment brand,” observed Sarandos. “Under this transaction, they don’t have to do that anymore.”

The co-chief executives sounded remarkably relaxed about regulatory approval, despite president Donald Trump’s recent public comments on media consolidation. Sarandos revealed he has spoken to the president “many times since the election” about entertainment industry challenges. The pitch? Netflix has employed 140,000 people in US original productions from 2020 to 2024, contributed $125 billion to the American economy, and is building a $1 billion studio on a former military base in New Jersey. “The president’s interest in this are the same as ours, which is to create and protect jobs,” Sarandos insisted.

The deal’s architecture reveals Netflix’s confidence in its core competencies whilst acknowledging its limits. The company identified two “highly executable” value centres: extracting more from Warner Bros’ title library through Netflix’s superior distribution, and optimising HBO as an additional pricing tier—skills Netflix honed whilst building its advertising business. A third phase of IP exploitation exists, admitted Peters, but “we actually don’t know exactly what those are. So we didn’t give ourselves credit for them in the valuation model.”

On advertising, where Netflix projects revenues will more than double in 2025, the Warner Bros content provides premium inventory advertisers crave. The company now runs its own ad technology stack, having added Amazon as a demand-side platform and rolled out interactive ad formats. By 2027,  Peters promised, Netflix will deploy “nondeterministic targeting model-based approaches”—the sort of algorithmic wizardry that makes Madison Avenue swoon.

Gaming represents another frontier where Warner Bros assets could prove useful, though again Netflix hasn’t baked this into its deal mathematics. The company’s strategy has crystallised around immersive narrative games based on owned IP (imagine deeper Squid Game universes), safe kids’ games without in-app payments, classic game IP like Red Dead Redemption on mobile, and social “family game night” experiences on television. Warner Bros’ gaming studios and properties like Mortal Kombat could accelerate this, but  Peters was careful to note: “We actually didn’t attribute any value from the get-go.”

The combined entity’s content spending trajectory remains aggressive. Netflix currently spends $18 billion annually on content and plans to grow that figure. Post-merger, the $30 billion combined spend will keep climbing. “We have been growing content spend and expanding margin as a stand-alone,” emphasised  Sarandos, “and we’ve modelled to do that in the future as well.”

The confidence stems from Netflix’s mere eight per cent US viewership share—or under 10 per cent in every country it serves. “We believe there’s ample opportunity to essentially continue to grow that value,” said  Peters.

The fourth quarter slate showcases Netflix’s current formula: Stranger Things returning for its final season, Knives Out 3: Wake Up Dead Man, and buzzy newcomers like Black Doves. The 2026 pipeline includes Greta Gerwig’s Narnia, new seasons of Bridgerton and One Piece, and films from Charlize Theron and Matt Damon. Live programming expands beyond US time zones, with the World Baseball Classic in Japan signalling Netflix’s global ambitions for real-time events.

On artificial intelligence, the co-chief executives struck a notably cautious tone about generative content. “It has to be better first,” insisted  Sarandos. “If it is just faster and cheaper without being better, it’s going to be bad for everybody.” 

The company sees AI enhancing three areas: member personalisation and conversational search, advertising creative and targeting, and production efficiencies—but only when it improves storytelling quality rather than merely cutting costs.

Management continuity at Warner Bros appears secure, given the lack of redundant business units. “We love these businesses. We like the leadership,” said Peters. The studio, television production arm and HBO will keep their leaders and continue operating independently—a marked contrast to typical merger playbooks that promise efficiency through elimination.

As for complexity concerns about bolting Warner Bros’ theatrical, licensing and premium cable businesses onto Netflix’s streaming-native model, both executives dismissed such worries. Netflix has repeatedly added new dimensions—original series, then films, then unscripted, then 50 countries of production, then live events, then advertising, then gaming. “Simplicity was an early super power,” acknowledged Sarandos, but “today, I think it’s enabled us to do things that are really much more complicated but also chase bigger prizes.”

The deal’s ultimate test will come from regulators, rival bidders and, eventually, subscribers voting with their viewing hours and wallets. But Netflix’s pitch is seductively straightforward: take Hollywood’s most storied studio, keep what makes it special, add Netflix’s distribution muscle and data science, and create something larger than the sum of its reels. “We’re looking forward to delivering all the value that we see in that deal for everyone,” promised Peters.

In streaming’s great consolidation game, Netflix is betting its blockbuster reputation that old Hollywood and new technology can finally share the screen.