Despite years of proclaiming that it’s a “builder, not a buyer,” Netflix appears to be warming up to the idea of actually buying something.
“We focus on profitable growth and reinvesting in our business, both organically and through selective M&A,” co-CEO Ted Sarandos said on a video conference call with investors, emphasizing the “selective M&A” bit.
The comments come on the heels of Warner Bros. Discovery launching a strategic review following “unsolicited interest” from “multiple parties” for all or part of the company. CNBC’s David Faber reported on Tuesday that Netflix and Comcast are among the interested parties in the streaming and studio side of the business, which is set to separate from the linear networks side in April. WBD has also reportedly rejected a bid from Paramount for being too low.
Sarandos’ Tuesday remarks also took a markedly different tack than his co-CEO, Greg Peters, who earlier this month threw shade at big media mergers after word had gotten out that Paramount was seeking to buy all of WBD. “One should have a reasonable amount of skepticism around big media mergers — they don’t have an amazing track record over the history of time,” Peters said at a media conference.
Sarandos sounded more amenable to the idea.
“It’s true that historically, we’ve been more builders than buyers, and we think we have plenty of runway for growth without fundamentally changing that playbook — nothing is a must have for us to meet our goals that we have for the business,” Sarandos said, adding, “In general, we believe that we can be and we will be choosy.”
Notably, Sarandos noted there’s been “no change” to Netflix’s disinterest in “owning legacy media networks,” likely referencing the upcoming Warner Bros. Discovery split that will divide the company into Warner Bros., which will house the film studio, HBO and streaming assets, and Discovery Global, which will consist of the company’s linear networks.
Peters addressed the potential risk if another company scoops up WBD, noting that even if some of its competitors get materially bigger, it doesn’t change the competitive landscape.
“Watching some of our competitors potentially get bigger via M&A does not change in and of itself, at least our view on the competitive landscape, and we don’t think it changes the substance of the challenge that our competitors face,” he said.
