(Welcome to the “Most Important Story of the Week”, my bi-weekly strategy column analyzing the most important (but often not buzziest) news story of the last two weeks. I’m the Entertainment Strategy Guy, a former streaming executive who now analyzes business strategy in the entertainment industry. Please subscribe.)
Of the various genres of internet article, or specifically, social media content, the “I’m leaving [insert social platform here]” might be the worst. With that caveat out of the way…if you want to keep up with me on social media, follow me on Substack, BlueSky or LinkedIn!!!
Notice who I left out? Yep, Twitter (sometimes going by the nom de plume “X”).
Why? Their policies, which, personally, I just can’t abide. I hate that federal law doesn’t prevent AI/LLMs from stealing everyday citizens’ likeness and voice without permission. But using people’s likeness to publish awful/horrific images (those words aren’t even harsh enough)? I don’t even have words to describe my reaction to that.
So I won’t be supporting a platform that doesn’t see an issue with that.
I won’t pretend like this is a huge sacrifice for me or my business. Since I won’t pay for a blue check, Twitter barely sends any traffic my way, plus logging in can be a huge distraction, which wastes time I could be spending writing articles or analyzing data. So what’s the point of staying on Twitter? In this case, my personal ethics and business interests align quite nicely.
I want to shout out fellow writer, Rick Ellis, inspiring me to make the change. Again, I draw the line on unethical AI use, and Twitter is that.
Well, now that I’ve either bugged you or delighted you, on to the news of the week, starting with some praise for a few content moves from Netflix I love, because they help fill a key niche in Netflix’s portfolio (but have a dark side…). I’ll also look at Disney’s succession news, the most overvalued company in America, a big change in social media, a banner year for M&A, and a whole lot more.
Let’s dive in.
Most Important Story of the Week – Netflix’s Podcast Play
After news broke that Netflix was buying Warner Bros., I saw the joke—which definitely made me laugh—that “Netflix is definitely a traditional Hollywood studio now that they’re trying to merge their way to future growth.”
This industry sure does love its mergers.
I’ve long thought Netflix could have used its booming share price to buy more TV assets in the mid-2010s, such as Discovery (ha!) or AMC or Lionsgate. My worry, though, was that the moment they acquired a traditional media company, let alone cable channels, it would crush their stock price.
So, of course…
Huh. Since Netflix started trying to buy Warner Bros, its stock price HAS collapsed.
While its stock price is down, Netflix itself keeps making the most money of any streamer, including $45 billion in revenue in 2025, resulting in over $10 billion in profit and $9.4 billion in free cash flow.
Netflix, of course, needs to keep growing those numbers. Buying Warner Bros. is one (expensive) way to do that. Buying Pay 1 film window rights (and likely making fewer original films) is another way. Buying one-off sports rights is also a way to do that (while spending a lot less than traditional media companies).
But the smartest way is to evolve. In 2025, Netflix added WWE programming. In 2026, Netflix added two other distinct content genres in 2025 that continue to subtly differentiate Netflix from the rest:
- A push to bring on live videos from podcasters.
- An effort to bring top YouTube creators onto their platform.
Together, these two moves show Netflix has found new, cheaper ways to engage its audience. And while I think these are smart strategic moves on their own, they also reveal the key economic challenge facing Netflix: to grow profitability going forward while minimizing spending. These two moves also reveal a key advantage Netflix has over YouTube when it comes to talent, an advantage we shouldn’t minimize.
The Key Numbers That Explain Netflix’s Latest Strategic Shift
First, the good news: Netflix increased its global subscriber base to 325 million at some point in Q4 of 2025, a nice round number good enough to report to the world. Though, as Sean McNulty reported in his analysis, that’s only an 8% increase globally. Unfortunately, their subscriber growth is slowing, and could slow down further given that they’re out of easy levers to pull to juice subscriber numbers (like limiting password sharing).
Worse, as I saw many others report, their engagement was down. Specifically, the hours per subscriber dropped again in 2025. Here’s Emily Horgan’s analysis on usage per sub:
To keep ahead of their rivals, Netflix plans to increase its spending by 10% in 2026. This news, combined with the announcement that they’re pausing stock buybacks, worsened their stock decline.
Yet Netflix may have a solution to this problem. The folks at Sherwood looked at Netflix’s content spend per dollar of revenue they make and a fascinating trend emerges:
It’s declining! Some of this comes from likely what we’d call unsavory solutions—particularly moving shooting overseas in pursuit of tax credits (see Death by Lightning as one recent example)—but a lot of it is also smart budget allocating, in particular exchanging expensive Netflix original films for cheaper Pay 1 licensing deals. It also comes from Netflix’s relentless price increases and the introduction of advertising, boosting the top line.
It also reveals why Netflix is aggressively moving into new creative ventures, like podcasting and the creator economy.
The Need (and Value) of Live TV
Netflix made a bunch of deals with podcasters in 2025:
- The Ringer, especially The Bill Simmons Podcast
- Barstool Sports
- iHeartRadio
- Pete Davidson
- Michael Irvin
- And probably some I missed!
The best framework to think about these deals is probably through a “jobs” lens. For those not familiar, this strategy angle asks, “What job does a product fill for a customer?” So a car isn’t just a car; its “job” is to move you from place to place. When you think about it like that, you can imagine alternatives to cars that also fulfill that job (public transportation, walking, ride shares) and then compare prices. You can also craft products to fulfill jobs in unconventional ways.
Most of Netflix’s content fills the job of either finding something quick and easy to just watch (think reruns of The Office back in the day or episodes of Grey’s Anatomy nowadays) or “must watch TV” (think Stranger Things or Wednesday).
“TV”, though, fulfills many, many more roles than that. One job broadcast and cable TV provide is educating folks about the world, and we call that “news”. Notably, Netflix has never really dabbled in this space, since they don’t have live production capabilities and news can be expensive. Another job is fulfilling the role of “talk show” in the landscape.
That’s the genius of these podcast moves, in my opinion: they allow Netflix to get into news without the upfront expense. Most of these podcast companies already make videos for YouTube, thus they have to build their own infrastructure and capabilities. Netflix is simply moving their video feeds over to its service.
These fill real niches in the content landscape as well. Take the Bill Simmons example. Admittedly, I’m a very regular listener, but if you ask what jobs he “fills” for me, it’s the job ESPN’s SportsCenter used to fill: a summary of the news on my two favorite sports, the NFL and NBA. I listen to him to get the news. Going forward, I could just watch him on Netflix and fill the same gap. And when he interviews guests, he’s filling that “talk show” role, highlighting some new piece of culture, be it book, show or movie. That’s another genre of programming Netflix has struggled with.
Now, the integration of podcasts with Netflix won’t be perfect, as, for example, if I start Bill Simmons ’ podcast on Netflix, it’s not like my podcast app will know where I stopped watching. That’s going to be a challenge for Netflix. And not every podcast will appeal to every demographic. Indeed, most of these folks fill specific niches.
I’ll also be clear: I don’t expect these shows to hit big numbers. They’re still podcasts, and podcasts just don’t have the same reach. So how does this pay off? Crucially, the prices for these deals are very low, around the $5 to $10 million range, if the reporting is to be believed. In other words, Netflix may be getting a TV series worth of viewing (it depends on a lot!) for a fraction of the price.
Now, since Netflix started this podcast push, we’ve seen some other folks (especially Hulu) start to dabble as well. But anyone could have grabbed these creators years ago. Instead, places like Hulu, Paramount+ and Apple TV(+) mostly copied Netflix’s content strategy at the time, and now they’re copying Netflix again. But Netflix has clearly prioritized the biggest outlets and now has a head start. Again.
The Dirty Secret of Netflix’s Play
Listen, the last time I said I loved a Netflix strategic move, it came with a giant caveat. Specifically, I loved the WBD merger decision for them, but also hated it, for antitrust reasons (a subtle point that many people missed).
You could take everything I’ve said about buying podcast creators and apply it here. Strategically, it makes sense. See all of the above.
But is it also potentially a backdoor way to pay creators less? Absolutely.
This didn’t come up in Netflix CEO Ted Sarandos’ testimony at the Senate last week, but I saw some coverage afterwards. Essentially, instead of buying talk shows and paying guild and union wages, Netflix is buying podcasts and just paying small license fees. This could be construed as an anti-union play, to avoid paying talk show rates.
Legally, though, it’s tough to stop. As long as YouTube exists, with no easy (but not zero) chance of unionizing its workers, Netflix can take advantage.
Speaking of YouTube…
The Dirty Secret of YouTube’s Economics
There’s a reality we have to admit about the creator economy despite the hype:
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