Animal Spirits Podcast — EP. 442: Netflix vs. Paramount

Date: December 10, 2025
Hosts: Michael Batnick & Ben Carlson
Theme: Finance meets culture as the hosts dig into recent market trends, predictions, bubbles, personal finance, and the bombshell news of Netflix’s bid for Warner Bros.—and what it could mean for Paramount, movie theaters, and streaming.

Episode Overview

This episode tackles major themes in investing and culture, starting with sweeping trends in U.S. tech stocks, annual prediction reviews, and the changing nature of inflation and wealth. The core of the episode is an in-depth, spirited discussion analyzing the business, creative, and consumer implications of Netflix’s stunning move to acquire Warner Bros., and how this may reshape Hollywood as well as the streaming wars.

Key Discussion Points & Insights

1. Market Concentration & Tech’s Dominance

Timestamps: 02:53–07:17

• Chartkid Matt’s Sector Driver Chart: Tech and communications services (Meta, Google, etc.) now make up ~80% of S&P 500 return this decade.
  • "If you put those two together, tech and comm services account for nearly 80% of the total return this decade in the 2000s." — Ben (03:43)
• Bessembinder Effect: A handful of stocks drive market gains.
• NASDAQ Returns Analysis: Since 1995, only 5 down years for NASDAQ 100—a down year always means a massive 30%+ loss.
  • "Literally, there's five down years since 1995. Every single down year is 30% or worse." — Ben (05:41)
  • "This is a face blower and a melter as well, both at the same time." — Michael (06:21)
• S&P 500's comparable drawdown only in 2008, highlighting unique tech volatility.

2. Predictions for 2025: Hits and Misses

Timestamps: 08:01–13:38

• Michael walks through his bold 2025 predictions—graded in real time.
  • Private investment surge: Check (Blackstone record flows).
  • Degenerate stocks (“mjunk stocks”) surge: Correct again.
  • Money markets swelling to $8T: Nailed it.
  • Mortgage rates/housing market frozen: Right again.
  • Equal-weight S&P outperforming: Miss—market cap won.
  • Nvidia to disappoint: Half right—stock fell but not on earnings.
  • VIX spiking to 50: After debate, possibly correct intraday.
  • MicroStrategy Levered ETF “blowing up”: Did not happen (yet).
  • Worst 2024 performer rebounds in 2025: Some picks worked (Dollar Tree), some didn’t (Moderna).
  • “Obligatory surprise”: Correct—Liberation Day came out of nowhere.
• "All right, this was a high degree of difficulty here...Momentum keeps going in the first half, but we have a double digit correction in the back half...Gave myself a 1% chance. So absolutely wrong." — Michael (13:11)
• Overall, Michael estimates about 4-5 out of 10 predictions were correct.

3. OpenAI, Tech Bubbles & Spending

Timestamps: 13:55–19:41

• Joe Weisenthal’s chart: OpenAI’s projected cash burn dwarfs historical losses by Amazon, Uber, Tesla, Spotify.
  • "If OpenAI is...not able to meet its financial obligations. That is...the eye of the storm. That's the epicenter. If we're in a bubble, that's the bubble." — Michael (14:44)
• Unmatched scale of current AI investment could signal a bubble, but must weigh Microsoft’s deep pockets.
• Extensive debate on whether these losses are sustainable, or just creative accounting and hype.
• Commentary on social media personas vs. reality—Michael Burry, “supervillain” perceptions, and authenticity in finance Twitter.

4. International Stocks, Wealth, and Inflation

Timestamps: 19:47–29:54

• Fidelity’s outlook: International stocks (ex-U.S. ACWI) massively outperformed U.S. in 2025.
  • "International stocks are crushing US stocks right now." — Ben (21:23)
• Predictions that 2026 could see international outperformance break through into mainstream attention.
• 401(k) “millionaire” stats: Only 3.2% of balances over $1M—surprisingly low at first glance.
• Discussion on "moderate millionaires” and how wealth doesn't always equate to changes in spending habits or perceived status.
• Inflation and wage growth: Wages up ~25% this decade, keeping pace with headline inflation, but creates a persistent feeling of "falling behind."
  • "I got a 25% raise and I’m still in the same spot." — Michael (29:54)

5. Money Flows, Labor Market, and Consumer Behavior

Timestamps: 29:56–33:52

• Robinhood’s surging net deposits raise the perennial question: “Where is all the money coming from?”
• Disposable income and employee compensation outpacing inflation on average, according to Ryan Detrick.
• Labor market cracks: Small businesses (20-49 employees) shed jobs for the 6th time in 7 months—first signs of weakness not yet felt by most consumers.
• "Even if the labor market on the edges...is slowing, people keep spending money." — Ben (33:33)

6. Wealth, Happiness, and Nostalgia

Timestamps: 33:37–35:28

• Why aren’t Americans happier despite being “wealthier than ever”? Chris Arnade’s thesis: Community and meaning have been sacrificed to consumerism.
  • "We're a material society. It's all hollow." — Michael (34:47)
• Revisiting perennial debates—what class you’re in, how happiness relates to wealth, and whether minds ever truly change (“you’re never changing anyone’s mind on this stuff”).

7. Consumer Inflation Oddities: Why Are TVs Cheaper?

Timestamps: 35:41–39:14

• Ben marvels at 65” TVs for $250 at Target: Why do TVs always get cheaper, unlike other consumer tech?
• Michael weighs in: TV market is hyper-competitive, people replace TVs less often, and Apple/phones live on planned obsolescence.
• Riff on generational “leaps” in TV tech and kitchen gadgets—material purchases (sometimes) can make you happy.

8. AI Bubble Check: IBM CEO on Data Center CapEx

Timestamps: 40:24–42:00

• IBM CEO claims it will take $8 trillion in global capex for the coming wave of AI data centers—numbers are “so bananas, it’s hard to wrap your head around.” (40:28)
• Hosts doubt these eye-popping investment projections will hold up or be profitable to fund.

Main Segment: Netflix’s Blockbuster Warner Bros. Bid

Timestamps: 49:30–59:45

a. The Deal(s), The Stakes

• Netflix has an accepted $72 billion equity (plus $10B debt) offer for Warner Bros.—Paramount was the presumed winner.
• Warner Bros.’ legendary movie/studio roster: Clint Eastwood, Kubrick, Nolan; IPs: Harry Potter, Barbie, Batman, etc.
• Streaming assets: HBO Max/Max, but deal excludes legacy networks (CNN, TNT, etc.).

b. Implications for Hollywood, Movie Theaters, & Consumers

• Netflix reiterates it will keep theatrical releases for now, but Ben is deeply skeptical:
  • "I don't believe you. I think...the writing's on the wall, man. These things are gonna be going straight to streamers for the most part." — Ben (51:33)
• Michael pushes back; the decline of movie theaters is old news, but shorter exclusivity windows will accelerate this trend.
• Most observers (smart money, Belloni, etc.) think a Netflix buy is better for Hollywood labor, but worse for theaters.
• HBO's identity and quality is a major concern for Ben:
  • "My biggest worry is HBO...that’s the crown jewel." — Ben (53:56)
• All agree: The directors/creators matter most, and “IPs won’t guarantee success.”

c. Will the Deal Work? (Spoiler: Probably Not)

• Virtually no big media/entertainment merger of this scale has ever worked.
  • "In our lifetimes, there’s never been an entertainment merger like this that has worked." — Ben (56:52)
• Netflix may see this as a last, desperate land grab against YouTube—increasingly its fiercest competitor.
  • "It does reek of desperation a little bit." — Michael (56:14)
• Is the deal even economically sound? Michael is skeptical about profit/cost synergies.

d. Speculation on Bid War’s Outcome

• Polymarket odds: Paramount 43%, Netflix 38%. Michael leans Paramount—wonders if Netflix is running up the price.
• Breakup fees are costly; shareholder/CEO tension could tip the outcome.
  • "Now Paramount needs Warner. Like if Netflix gets Warner Bros for real and Paramount is just Paramount they're dead." — Michael (58:23)
• Industry faces likely further consolidation; smaller streamers (Peacock, Paramount) likely to merge for survival.

Quotes & Notable Moments

• "This is the Disruptor buying Hollywood. I mean, Warner Bros. is Hollywood." — Michael (59:15)
• "I just think it’ll be a blessing in disguise if Netflix doesn’t get this, because these deals barely ever work out. That would be my baseline." — Ben (59:22)
• Both hosts agree: If Netflix loses, it's probably a stock-buying opportunity.

Culture & Recommendations Segment

Timestamps: 61:42–end

• Light, nostalgic banter about classic '90s movies like "Blank Check" and "Brewster's Millions."
• Recommendations for recent movies ("Caught Stealing" with Austin Butler, directed by Darren Aronofsky) and nonfiction audiobooks like “Unscripted.”
• Commentary on 1990s video quality nostalgia: "The video quality was just better back then..." — Ben (67:44)

Structure by Segment (w/ Key Timestamps)

• Market & Tech Recap: 02:53–07:17
• Prediction Review: 08:01–13:38
• OpenAI & Tech Bubble: 13:55–19:41
• Global Equities & Inflation: 19:47–29:54
• Consumer & Labor Markets: 29:56–33:52
• Wealth & Happiness: 33:37–35:28
• TV Pricing Discussion: 35:41–39:14
• AI Bubble & IBM: 40:24–42:00
• Netflix/Warner Acquisition: 49:30–59:45
• Pop Culture Recs: 61:42–end

Tone and Style

Conversational, irreverent, and analytical—Michael and Ben maintain a casual and often witty banter, balancing deep dives into data and industry commentary with relatable personal anecdotes and pop culture references.

Summary Takeaway

This episode centers around the increasingly narrow drivers of market returns, irrational exuberance in AI funding, and the seismic shift Netflix’s proposed Warner Bros. acquisition would mean for the business of entertainment. Both hosts bring a skeptical edge: tech bubbles don’t last forever, most streaming/media mergers flop, and the next phase of Hollywood may not look as glory-filled as yesteryear—but for investors and consumers, it’s a story worth watching play out.