Everyone knows the quote. Netflix. HBO. Ted Sarandos. Just over a decade old, it rears its head every few years as Netflix and HBO find themselves in ever-evolving positions in the Hollywood food chain. And, of course, it has come roaring back once again in the past week with the news that Netflix has struck a deal to acquire HBO-parent Warner Bros Discovery. If the deal actually happens – still a pretty big "if" on a few fronts that will likely play out over months, if not years – it seems like the perfect bookend for the quote.
But just as interesting as the q…
Everyone knows the quote. Netflix. HBO. Ted Sarandos. Just over a decade old, it rears its head every few years as Netflix and HBO find themselves in ever-evolving positions in the Hollywood food chain. And, of course, it has come roaring back once again in the past week with the news that Netflix has struck a deal to acquire HBO-parent Warner Bros Discovery. If the deal actually happens – still a pretty big "if" on a few fronts that will likely play out over months, if not years – it seems like the perfect bookend for the quote.
But just as interesting as the quote itself is just how off Sarandos actually was in his framing. Not because he was wrong, but because in thinking that Netflix had to become HBO, he was thinking far too small. He’s admitted this mistake in the past, but that’s what this deal truly highlights. Because if it happens, it will cement Netflix as not just HBO, and not just cable, but potentially all of Hollywood.
As we await future counter-bids, hostile takeover efforts, and/or regulatory challenges to the deal, it’s worth taking a step back to think through what Netflix is actually thinking here. I like to think through what Netflix is thinking. And I think I have a pretty good track-record over the years when it comes to thinking through such things with Netflix. So here’s my current thinking...