Netflix needs Warner Bros.’s IP and franchises to remain the default streaming service

Warner Bros. Held out for a bigger shared win. An insider told me that Warner Bros. Chief David Zaslav was not eager to partner with Paramount Skydance because of financing, the price, and the fact that rookie CEO David Ellison would not only retain controlling shares but was still digesting his last win. 

Activate Consulting CEO Michael J. Wolf, a veteran media consultant and former president of MTV Networks, argues that this deal is a must-do for Netflix, given the rising strength of competitors like YouTube, Amazon Prime and Tubi. “No doubt Netflix is the default streaming service,” Wolf told me over the weekend. “Going forward, what will be required to win is more iconic IP and more global franchises that work everywhere. Warner Bros. Discovery is one of the only companies out there that will give Netflix both of these at once.” 

Experience matters. Content and the ability to distribute it have fueled many an entertainment merger. But history is filled with examples of those who’ve generated huge value for stakeholders from such deals and many that did not. The AOL Time Warner merger proved to be an expensive cautionary tale about clashing cultures, mistimed market shifts and the perils of buying at peak bubble. (Time Warner’s Turner acquisition, on the other hand, was a home run.) I remember GE CEO Jeff Immelt telling me “we know this world” when merging VivendiUniversal and NBC. Turns out GE didn’t create as much value as NBC Universal’s subsequent buyer Comcast did. Netflix co-CEO Ted Sarandos is right to say that “our mission has always been to entertain.” But even if he overcomes antitrust scrutiny, he must then win over Hollywood, investors and consumers who already balk at the idea of this new behemoth.

AI is changing the game. We’ve already seen how much AI is changing the entertainment game, with AI-generated actor Tilly Norwood, AI influencers, Coca-Cola commercials, and movies. Since Netflix is a longtime builder—versus a buyer—some wonder if the streamer is interested in Warner Bros.’ Deep library for reasons other than simply giving consumers more stuff to consume. As Melissa Otto, head of research at S&P Global Visible Alpha, told Coins2Day, the future of entertainment may come down to who owns what she calls “the video corpus” to train and power the next generation of AI models. 

Contact CEO Daily via Diane Brady at [email protected]

Top news

China’s $1 trillion trade surplus

President Trump’s tariffs weren’t enough to rein in China’s exports. The country’s trade surplus blew past $1 trillion for the first time this year, with one month to spare. China’s exports to the U.S. Have plummeted, falling 29% in November year-on-year, but shipments to other countries, especially in southeast Asia, have soared, making up the difference. 

IBM’s big AI deal

IBM is reportedly in talks to buy Confluent, a company that manages real-time flow of data in big AI models, in a deal worth $11 billion. The acquisition would be IBM’s largest in recent years; the tech giant announced it was slashing thousands of jobs in November in a shift towards AI. 

Apple’s C-Suite shakeup

Four Apple executives who report to CEO Tim Cook have stepped down in the past week, marking a major shakeup at the tech giant known for C-Suite stability that’s hampering its effort to catch up in the AI race. 

Deutsche Bank pay bump

Deutsche Bank wants to boost the pay of its supervisory board chair, Alexander Wynaendts, who is already the highest-paid chair in Germany’s Dax 40 companies. Germany’s largest lender will ask shareholders to approve a 47% bump for Wynaendts, which will take his pay to roughly $1.6 million. 

Rate cut expectations

Wall Street analysts expect Fed chair Jerome Powell to announce another rate cut following the central bank’s meeting this week but to hold off on signaling a January cut as he balances dovish and hawkish committee members. Bank of America analysts wrote on Friday that Powell will have a hard time sending “a credibly hawkish signal” as important jobs and consumer data will be released between this week’s meeting and the one in January.

China’s newest AI billionaire

A homegrown Chinese chipmaker, Moore Threads Technology Co., staged China’s second-largest IPO of the year on Friday, raising $1.1 billion. Its stock rocketed 425% in its Shanghai debut, making co-founder Zhang Jianzhong, an ex-Nvidia executive, a billionaire and giving momentum to China’s push for chip self-sufficiency. 

Moving on from the Metaverse 

Meta CEO Mark Zuckerberg is leaving the Metaverse behind as the company announced it is cutting 30% from the budget of the lab responsible for the project, per Bloomberg. The experiment that Zuckerberg once described as the “successor to the mobile internet” has accumulated $70 billion in losses since 2021.

The markets

S&P 500 futures were up 0.13% this morning. The last session closed up 0.19%. STOXX Europe 600 was flat in early trading. The U.K.’s FTSE 100 was down 0.08% in early trading. Japan’s Nikkei 225 was up 0.18%. China’s CSI 300 was up 0.81%. The South Korea KOSPI was up 1.34%. India’s NIFTY 50 is down 0.86%. Bitcoin is up at $92K.

Around the watercooler

Inside the Coins2Day 500 CEO pressure cooker: surviving is harder than ever and requires an ‘odd combination’ of traits by Nick Lichtenberg

Leaders in Congress outperform rank-and-file lawmakers on stock trades by up to 47% a year, researchers say by Jason Ma

Nvidia CEO says data centers take about 3 years to construct in the U.S., while in China ‘they can build a hospital in a weekend’ by Nino Paoli

Elon Musk says Tesla owners will soon be able to text while driving, despite it being illegal in nearly all 50 states by Sasha Rogelberg

CEO Daily is compiled and edited by Joey Abrams, Claire Zillman and Lee Clifford.