San Francisco (United States) (AFP) – Netflix shares plummeted more than 8 percent on Thursday as the TV streaming titan reported quarterly revenue of $12.25 billion, which slightly topped expectations. An earnings letter to investors came with word that co-founder Reed Hastings will step away from the company when his term as chairman of the board of directors ends in June. “Netflix changed my life in so many ways,” Hastings wrote in the letter. “My all‑time favorite memory was January 2016, when we enabled nearly the entire planet to enjoy our service.”
Netflix faces increasing competition from rival streaming services as well as short-form video platforms like TikTok that vie for people’s attention. The share price plunge came despite Netflix reporting profit of $5.28 billion, which was boosted by a fee received for the termination of a deal to buy Warner Bros. Discovery. During the recently ended quarter, Netflix declined to sweeten its takeover offer of Warner Bros, effectively ceding the media giant to a rival bid from Paramount Skydance after deciding the deal was no longer financially attractive.
Netflix logged a termination fee of $2.8 billion related to the nixed deal, according to its earnings report. Netflix not following through on the arrangement will likely see the storied Hollywood studio and a group of TV properties which includes CNN fall into the hands of Paramount, fundamentally reshaping US media. Paramount’s deal to buy Warner Bros. Discovery is in a regulatory and shareholder approval phase. The bidding war had drawn White House attention, with President Donald Trump insisting he had a say in the outcome.
Oracle founder Larry Ellison is the father of Paramount Skydance CEO David Ellison. Larry Ellison, a longtime Trump ally, largely financed his son’s takeover of Paramount and his subsequent bid for Warner Bros. Discovery. A victory by Paramount would see CNN — often the target of Trump’s threats and criticism — pass to Ellison family control, amid backlash that a Paramount-owned CBS would see changes to the White House’s liking.
Netflix shares climbed after it stepped away from the Warner bidding, with analysts noting that the money it saved could be invested in audience-drawing shows and its potentially lucrative advertising business.
© 2024 AFP
