Episode summary
Netflix to Boost Program Spending in 2026, Crimping Profit | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 39 min · Hosts: Carol Massar, Tim Stenovec · Guests: Eric Clark, Geetha Ranganathan, Bob Michele, Joanna Gallegos
Summary
Netflix’s latest quarter beat Wall Street on the top line, but the company warned that profit will be pressured by higher program spending in 2026 and the costs of closing its Warner Bros. Discovery deal. Management said content spending should rise 10% next year, share buybacks will pause to help fund the acquisition, and first-quarter earnings guidance came in below consensus. The company also disclosed its first reported advertising revenue, which Bloomberg Intelligence said was about $1.5 billion in 2025 and is expected to double in 2026.
The guests mostly argued that the stock’s pullback reflects deal uncertainty more than any deterioration in the core business. One guest said Netflix remains the dominant streaming platform, keeps expanding margins and subscriber growth, and still offers strong free cash flow at a lower valuation. The analyst was more cautious on the near-term outlook, saying the ad business is progressing but is still below what the market had hoped for, and that 2026 raises the question of what the next growth catalyst will be if Warner Bros. takes longer or proves harder to close.
The program then widened to the broader market backdrop, with discussion of geopolitical noise, U.S. Treasury resilience, the lack of a realistic alternative to U.S. debt, and the appeal of shorter-duration fixed income. The final segment focused on corporate credit and ETFs, where a guest said resilient fundamentals, tight spreads, and investor demand for liquidity and yield continue to support the asset class.
Key takeaways
- The host and guests framed Netflix’s Warner Bros. deal as the main short-term overhang, not a sign that the core streaming business has weakened.
- A guest said Netflix stock is attractive after falling more than 30% from highs, citing strong free cash flow and continued margin growth.
- Bloomberg Intelligence said Netflix’s ad revenue was about $1.5 billion in 2025 and should double in 2026, but that is still below some market expectations.
- The analyst said content spend is set to rise about 10% in 2026, which will pressure margins alongside deal-related costs.
- A fixed-income guest argued that U.S. corporate credit remains resilient and that shorter-duration ETF exposure is where many investors still want to be positioned.
Notable quotes
“I will buy more Netflix tomorrow. Absolutely”
“they're just going to go back to the same playbook that has, you know, driven uh 17% annual uh subscriber growth for the last decade”
“the ad revenue uh you know definitely not bad but not gang buster”
“the resiliency of American companies and the debt that they're issuing”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenbec on Bloomberg Radio.
Yeah, let's bring in Eric Clark. He's chief investment officer of the RA Acuvest Global Advisors. About $1.2 billion in assets under management, portfolio manager, too of the Alpha Brands Logo ETF. He covers about 200 consumer stocks, including Netflix. It's the 11th biggest holding in the logo ETF. Eric joins us from San Diego, which I understand it's like 69° there. It's not like here, Eric, where the high today was 21°. So,
Don't rub it in. — Yeah. I don't even know why you guys like watch Netflix in San Diego. You just should be playing outside all the time. Um, a decline of 4% after hours right now. Are you buying more Netflix?
I will buy more Netflix tomorrow. Absolutely. — Because — And it's 75 here, by the way. — Oh, my bad.
Thanks. Thanks very much for that. We're done with this interview.
All right. So, why are you going to be buying tomorrow? Well, I you know, bigger picture, nothing's really changed with the business.
It's just that people have left Netflix stock because of the the Warner Brothers the time that it takes to get a deal done like this. So, people just say, "I just don't want to have my money tied up in something that's going to be a little more uncertain than maybe quote dead money. That's the opportunity.
So, the stock's down over 30% and business is still doing really well.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- netflix programming spending
- streaming earnings
- warner bros discovery deal
- fixed income market outlook
- federal reserve outlook
Companies and tickers mentioned
- NFLX
- JPM
- Netflix
- Warner Bros. Discovery
- JPMorgan Asset Management
- Accuvest Global Advisors
- BondBloxx
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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