Prof G Markets Netflix Stumbles on Earnings — While Warner Bros. Looks for a Buyer
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Oct 22, 2025 
In an engaging discussion, Jason Bazinet, Managing Director of Media and Entertainment Research at Citigroup, delves into Netflix's recent earnings stumble, citing currency issues and a hefty tax settlement. He also analyzes Warner Bros. Discovery's potential sale and identifies likely bidders. Joining him is Alex Heath, who explores OpenAI's new browser, Atlas, highlighting its competitive edge over Google with advanced features. They discuss how Atlas could reshape user experiences in browsing and data utilization, hinting at significant industry shifts.
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Netflix Miss Versus Business Strength
- Netflix missed earnings mainly due to a one-time $619M Brazil tax settlement and currency strength, not weak subscriber performance.
- Ad sales are growing fast but still only represent about 4% of Netflix revenue this year.
Ads Are Growing But Still Small
- Netflix's ad business may double to roughly $2B this year but remains a small share of total revenue.
- The ads inflection is meaningful strategically but not yet material to Netflix's overall revenue mix.
WBD Sale Creates Strategic Scarcity
- Warner Bros. Discovery's sale creates scarcity: buyer gains crucial scale while a loser app will be left behind.
- Bazinet rates Paramount most likely (60%) to buy WBD, Comcast a distant second (15%).