Netflix is poised for a strong year-end finish, backed by another quarter of standout performance. Quality content at a fair price remains the key driver of streaming engagement—and Netflix continues to deliver, not only by doubling down on its core programming but also by expanding into must-see live events that attract advertiser-coveted audiences. A robust Q4 content slate, including the final season of Stranger Things, will propel Netflix into the new year once again as consumer’s favorite streaming service.
Netflix Can’t Take Its Eye Off The Ball
Q3 also saw Netflix making progress on a number of non-core initiatives including podcasts, physical locations, and party games. But will Netflix find itself spread too thin as it advances a diversification strategy? Consumers choose Netflix because of its quality content. If the company goes too broad to become all things entertainment, it risks diluting its core amid a sea of eager competition. During its earnings interview, Netflix reinforced it remains focused on a strategy of testing into new categories and building into them based on demand signals.
Might Netflix Buy Warner Bros. Discovery?
While not superficially addressed by name during the earnings interview, Netflix said it has an obligation to consider M&A opportunities while acknowledging it has a history of being more of a builder. If reports are true that Netflix is among the interested bidders to acquire WBD, such a move would cement Netflix’s long-term dominance in the streaming wars. Not only would Netflix gain HBO’s premium original IP (and more), but it would also secure a critical missing piece in its TV strategy: live news, via CNN.
While Netflix said it has no interest in owning “legacy media networks,” the company has made no secret that it’s bullish to expand live programming beyond special events, including sports. Adding CNN (especially with its global footprint) would be a near-perfect match to deliver live news to Netflix’s worldwide audience. Simply put, the combination of Netflix and WBD would be a very big deal—one that would have ripple effects across the media landscape. It would strengthen Netflix’s IP, accelerate its advertising capabilities, and grow its global audience.
There Are A “Huge Number Of Places” To Bring GenAI To Netflix
Following some eyebrow raises after last quarter’s earnings interview when Netflix mentioned one if its shows used on-screen genAI footage ‘for the very first time,’ the company published genAI usage guidelines, protocols, and a risk assessment for content production. What’s notable is that Netflix wants creators to flag (early) any gen-AI elements that would appear in the content’s public-facing output. This speaks to the murky legal waters all companies are treading right now when it comes to genAI. The technology is evolving so fast that guidelines can’t keep up.
During this quarter’s earnings interview, Netflix said that genAI (when it comes to content creation) has more impact on UGC creators in the year term, and that for what Netflix does, “it takes a great artist to make something great.” For now, the company sees the majority of genAI use cases being integrated into existing tools and products.
Coming Soon: The State Of Streaming, 2025
Be on the lookout for our new (data heavy) Forrester report: The State Of Streaming, 2025—set to publish later this year. It dives deep into how and why consumers choose different streaming platforms as well as the top trends facing the industry, right now.
Forrester clients: Let’s chat more about this via a Forrester guidance session.
