Bloomberg Businessweek Podcast Summary

Episode: Netflix to Boost Program Spending in 2026, Crimping Profit

Date: January 20, 2026
Hosts: Carol Massar, Tim Stenovec
Notable Guests: Eric Clarke (CIO, Riavest Global Advisors), Geetha Ranganathan (Senior Media Analyst, Bloomberg Intelligence), Bob Michael (CIO, J.P. Morgan Asset Management), Joanna Gallegos (Co-founder, BondBloxx)

Main Theme & Purpose

This episode dives deep into Netflix’s financial outlook for 2026, focusing on its plans to increase program spending, the ramifications of its potential Warner Brothers acquisition, ad revenue growth, and implications for its stock price and investor sentiment. Broader macroeconomic themes include the resilience of U.S. corporate credit, turbulence in the global bond markets, geopolitical risk impacts, and the evolving ETF landscape.

Key Discussion Points & Insights

1. Netflix’s Stock Performance, Strategy, and Warner Bros. Acquisition

(01:46–10:13)

• Netflix Stock Dip & Investment Opportunity

  • Netflix’s stock declined about 4–5% after hours; now down over 30% from highs.
  • Eric Clarke is bullish: “I will buy more Netflix tomorrow, absolutely. ... I don't even think it matters what the outcome of the Warner Brothers deal is. You're just getting the stock at a great price here. So you just have to be patient, that's all.” (02:24–03:13)

• Warner Brothers Deal—Potential & Regulatory Uncertainty

  • Netflix competes not just with other streamers but all of consumers’ time (YouTube, TikTok).
  • The value in bundling Warner's assets to Netflix’s dominant platform.
  • Regulatory hurdles cast uncertainty over the deal.
    • “The assets in Warner are so powerful and they are in the best hands with Netflix. It's impossible to know about the regulatory stuff.” – Eric Clarke (03:22–04:14)

• If Netflix Doesn’t Acquire Warner Bros…

  • Clarke remains positive: Netflix would revert to its strong growth playbook, maintain leading content spend, and could pursue “tuck-in acquisitions.”
  • Praising management for resilience and innovation, especially with strong free cash flow and a rapidly growing advertising tier: “There's just a lot to like here. ... I love this thing on a dip.” (04:36–05:24)

• Content, Franchise Power, and Viewer Engagement

  • Despite shifts (e.g., end of Stranger Things), Netflix’s ability to refresh classics and invest in new IP, especially if they secure HBO/Warner assets.
  • “You get a bunch of creative people in a room... Let's say Sopranos for instance. What could we do to refresh Sopranos in the same theme? There's just so many, so many things that they could potentially do.” – Eric Clarke (06:32–07:00)

• Competitors’ Constraints

  • Paramount/Skydance, even if acquiring Warner assets, lack the creative and financial capability of Netflix due to higher debt loads (07:16).

2. Netflix’s Value Proposition & Ad Revenue

(07:43–10:13, 12:10–14:16)

• Subscription Value, Market Penetration, and Future Growth

  • Netflix offers great value, broad demographic reach, and diversification:
    • “It's still an absolute crazy good value at 20, even at 25 bucks... I can watch an unlimited amount of content on Netflix.” – Eric Clarke (07:55–08:53)
  • Recurring revenue, global scale, and resonance across generations.

• Parallel with Spotify

  • Clarke draws comparison, citing both as global content platforms with robust long-term potential, both seeing significant stock price declines despite strong fundamentals.

• Video/Audio Content Synergy

  • Podcasts and video content present big opportunity—not just an add-on.
    • “People want audiobooks, they want music, they want videos, they want podcasts. ... Both of these brands have just a wild opportunity, you know, long term gathering subscribers and bolting on new opportunities that drive operating efficiencies. Add AI to the, to the mix and more engagement, better profitability...” – Eric Clarke (09:22–10:13)

• Ad Revenue Growth & Market Expectations

  • Actual 2025 reported ad revenue: $1.5B, aiming to double in 2026—below street expectations (anticipated $2–2.5B already).
    • “It's the very first time they've actually reported advertising revenue... definitely not bad... but not really a number to kind of get too, too thrilled about.” – Geetha Ranganathan (12:10–13:08)
  • 2024 focused on (successful) subscriber growth; 2025 on price hikes; 2026’s catalyst uncertain—thus the drive for ad revenue and Warner Brothers deal.

3. Content Spend & Operating Margins

(12:10–14:16)

• Growth of Content Spending

  • Content spend up 7% in 2025, projected +10% for 2026 (including Warner Bros–related costs).
  • Operating margin guidance for 2026 “a little light” at below 32% (vs street’s 33%).

• Market Opportunity Still Large

  • Despite years of growth, Netflix controls under 10% of U.S. TV screen time (<9% per Nielsen, Dec. 2025), while linear TV still >40%.
    • “There is still a lot more room for streaming to grow and I think it absolutely will.” – Geetha Ranganathan (14:58)

• Impact of Sports & Streaming Shift

  • Marquee sports events are moving to streaming for the first time—potential for further growth as consumer behavior keeps shifting.

• AI and Content Creation

  • Anticipation of high-quality fully AI-generated movies in 2–3 years; Netflix likely to adapt and maybe lead.

4. Macro Environment – Markets, Geopolitics, and Fixed Income

(10:13–33:30)

• Broader Market Selloff, Geopolitics, and De-risking

  • Ongoing volatility driven by global geopolitics (e.g., U.S. / Greenland noise, European relations, Japan’s snap elections).
  • Treasury yields remain top-of-mind, albeit market reactions seen as orderly.

• Fiscal Discipline & The “New Normal”

  • Fiscal austerity is out; governments globally leaning on “borrow and spend,” with expectations of deficits persisting.
    • “Fiscal discipline is a thing of the past and there is a feeling that deficits can be financed and Japan is kind of telling us you can get to 300% and life's still good.” – Bob Michael (28:17)

• U.S. Debt’s Irreplaceability

  • No real global alternative to U.S. treasuries—foreign holders may pause new purchases but rarely sell en masse.
  • New tools like QE allow high government debt to persist.

• Rates, Fixed Income, & ETF Growth

  • Corporate credit remains strong; companies’ fundamentals resilient.
  • ETF flows see strong interest in short-duration and corporate bond products; innovation ongoing in private credit access.

• Emerging Market Debt

  • Category outperformed across fixed income in 2025; interest now in shorter-duration EM debt.

• ETF Innovation: Private Credit

  • Demand grows for transparency and access to alternative yield, with new ETFs (notably, BondBloxx’s PCMM) gaining traction.

• Fed Chair Succession Odds

  • Discussion of potential Fed chair picks (Kevin Warsh, Rick Reeder, “Bessant”); skepticism about true independence, but hope for more market-savvy choices.

Notable Quotes & Memorable Moments

• On Netflix’s Value and Strategy

  • “It's still an absolute crazy good value at 20, even at 25 bucks. I mean, I go out to dinner in San Diego and you get a drink and a half and it's 25 bucks. I can watch an unlimited amount of content on Netflix.”
    — Eric Clarke, 07:55

• On Warner Brothers Acquisition Regulatory Risk

  • “It's impossible to know about the regulatory stuff.”
    — Eric Clarke, 03:22

• On Ad Revenue Growth

  • “...not bad, but not gangbuster. ... definitely not bad given that, you know, this company made its foray into ads just a few years ago versus all of the other media giants. But again, not really a number to kind of get too, too thrilled about.”
    — Geetha Ranganathan, 12:10–13:08

• On Content Creation and AI

  • “In another two to two and a half years you will see the first high quality, fully AI generated movie come out. ... Definitely a possibility and definitely something Netflix is preparing for.”
    — Geetha Ranganathan, 16:22

• On Fiscal Austerity

  • “Fiscal discipline is a thing of the past and there is a feeling that deficits can be financed and Japan is kind of telling us you can get to 300% and life's still good.”
    — Bob Michael, 28:17

Timestamps for Important Segments

• (01:46–10:13): Deep dive into Netflix’s stock, Warner Brothers deal, streaming environment, and platform innovation (Eric Clarke)
• (12:10–14:16): Content spend, ad revenue analysis, Netflix’s growth paths (Geetha Ranganathan)
• (14:58–16:45): Streaming penetration, sports shift, AI’s role in content (Geetha Ranganathan)
• (20:03–33:30): Broader market volatility, geopolitical analysis, U.S. debt, fiscal policy landscape (Bob Michael)
• (36:38–44:00): ETF and fixed income trends, innovation in private credit (Joanna Gallegos)

Summary Takeaway

Netflix is weathering short-term market turbulence as it gears up for significantly increased program spending in 2026. Investors remain split on the Warner Brothers acquisition’s likelihood and impact, but bullish voices point to Netflix’s proven resilience, management quality, and the sheer scale of its platform and spending power. Advertising growth and new media (like podcasts and AI-generated content) signal future potential, even as content costs and competitive threats loom.

Beyond Netflix, the episode highlights how U.S. credit markets and ETFs remain robust despite global uncertainty, with asset managers and investors searching for innovative ways to access yield and diversify portfolios amid persistent geopolitical and fiscal volatility.

Listeners come away with a nuanced, realistic sense of both Netflix’s industry leadership and the macroeconomic currents shaping investment decisions in 2026.