派拉蒙华纳合并获批10月6日交割，Netflix回应估值质疑

Bloomberg Audio Studios podcasts, radio, news. Bloomberg Tech is live from the heart of Silicon Valley with Ed Lello in San Francisco.

Welcome to a special edition of Bloomberg Tech live from Bloomberg Screen Time in Los Angeles. Coming up this hour, we'll bring you conversations with some of the biggest names in the entertainment industry. And of course, AI is front and center. We'll be speaking with entrepreneurs and leaders across a changing tech and media landscape. I want to get to the big entertainment story today, which is Paramount's $ 110 billion Warner Bros. deal.

It is cleared to move forward. A federal judge has approved a settlement with a dozen states, and the companies now expect the merger to close October 6th. Timely. Bloom's Lucas Shaw leads our media and entertainment coverage, leads the screen time team, and we're here at screen time. But that was a big headline. Let's start with this is cleared. It's going to close.

Yeah. I we knew it was going to close as soon as the state AG's and the Writers Guild of America settled their lawsuit saying, you know, we we feel like you have agreed to certain conditions that make us satisfied. and David Ellison, the the chairman and CEO of Paramask Guidance, who will be the chairman and CEO of the Combined Company, is wasting no time making changes with staffing and leadership. And I expect we'll just see news pretty much every day over the next couple weeks.

There are also sort of uh details coming out now about what that new company looks like. Uh what does it look like on paper?

Well, we know a couple things. One is that Cindy Holland, who's been the head of streaming for Paramount Sky Dance, and who had previously been a top executive at Netflix, has left. And everybody believes that that means that Casey Bl who will be speaking at this conference later today will be in charge of streaming. That is what something that we have reported and something that I think others have reported as well.

Uh the the big news also yesterday was that they announced Enon Kry who has been the CEO of Mattel is joining as the co-CEO of the combined company. a little weird because David Ellison is the CEO, but you can think of Enan as the person who's going to come in and really run things dayto-day, cut a lot of cost, restructure, like all the nasty stuff that David Ellison doesn't want to be kind of stuck with is Enan's job.

Okay, so last night we kicked things off here in in Hollywood with a conversation with Netflix co Ted Sandos. And obviously it's in the past now, but the opportunity that Netflix had seen with Warner Brothers Discovery, you talked about that quite a lot. Let's just listen to a little bit of it. The plan was solid. Um I think we we and we certain we won the deal at some point. So we priced it right. Um at our scale that was the top price point where I thought we could return value to our shareholders with that asset.

Any more than that I didn't I thought we'd be taking into negative territory. I think macro point now that it is Paramount Skydance, Warner Brothers Discovery, the landscape shifting a bit and Ted Sarando's and you talked about how Netflix kind of is going to respond, how they're going to get growth in the future. It's tricky for him because I think prior to Netflix going after that deal, they were seen as the the biggest entertainment company on the block and just all things were going very well, it seemed for them. and their pursuit of Warner Brothers discovery, rightly or wrongly, triggered a lot of skepticism because people started to wonder why are they doing this?

Ted talked about it last night. It sort of changed the narrative for the company. And he says he's okay with that. It was a deal that was worth going for, but it has hurt them and their response right now is basically we don't need to do anything dramatic. We were in a good position before that and that has not satisfied investors. Uh it's a huge uh agenda today here here in Hollywood. Preview some of it. um you know and and and the big questions this industry is genuinely debating while we're all gathered.

Well, look, the the Paramount Warner Brothers deal, even though we know it's going to happen, is still top of mind for everyone because they're wondering what it's going to look like. So, we have Casey Boyd, as I mentioned. We also have Jerry Cardelli, who is David Ellison's deal guy, one of the largest shareholders in Paramount Sky Dance. I'm excited for both of those conversations. We have Dana Walden, who's the number two at the Walt Disney Company.

We have not had Disney at this event before, so I'm excited for that. Obviously, a company of great interest. AI as a topic as you mentioned the top of the show. That's big. I think you're gonna have Mikey Schulman, the CEO of Sunno on the show. I'll be interviewing him with uh with our colleague Ashley Carman this afternoon. So, that should be fun. Uh Blue Mos Lucas Shaw, leader of of our screen time team and this annual event.

Thank you very much indeed. I just want to stay with Netflix. Ted Sarando says the streaming giant needs to move faster. And when Lucas sat down with the Netflix co-CEO to talk about engagement, the push into live programming and the company's strategy for growth, he uh he was pretty strong. Listen to this.

We are growing engagement. Uh so we're growing on 200 billion hours of watching. We grew 2%, you know, in our last announcement,

right? But 2% is not what people are hoping for out of you, right? They're used to double digit growth in at least in certainly in revenue and to some extent even in viewership, they'd expect more. This is my this is my point about the the growth in general. Yes, overall we're not growing as fast as I want us to and we're working on on making that move faster. We are though also doing things that create a lot of headwind to that number.

Meaning when we do live programming on Netflix, which is a relatively new thing, um we spend about 5% of our content budget on live events. They generate about 1% of our watching.

Right? Now they all but they do a very different job than

they generate a lot of signups. They're really effective for

signup retention advertising all those things that they do but it creates engagement headwind and how you invest against it. Um and remember when I say we grew 2% that's an easy number to sneeze at but it's through all the growth of live. It's through incredible headwinds from things like the World Cup and world sports and all those things that are going on too. So it is a we are growing the business. We want to keep growing it faster.

This past quarter we did double digit revenue growth in every c in every region of the world. So the business is great and growing fine. Um I do I mean if you asked me when we if we were growing at 20% I'd be telling you I wish we were growing faster.

Right. So but when you said you wish you were going faster and we're working on it. What are the things that you are working on to kind of reacelerate that that growth?

Well these are some of the things are in the expansion of what we do. So live was an expansion of what we did that didn't necessarily bring more gross engagement but it brings very valuable engagement. So it's not a mystery that all engagement is not equal because if it's it's you probably are not surprised to know that an hour of judge duty in the middle of the day does not generate as much revenue as an hour of NFL football.

And so those

I saw some CPM chart recently that showed what you make per view versus what YouTube makes per view and yours is higher.

Yeah, we generate more. We monetize better. our programming monetizes better. Now we do we're looking constantly of how do we do things to bring more value to the members more things to watch more ways to watch all those things. So that is some of these things that are and and I I don't want to overcharacterize things like podcast a