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Netflix has said that the entertainment industry remains “intensely competitive” as it seeks regulatory approval for its $83bn deal to buy Warner Bros Discovery.
The streaming giant, which reported fourth-quarter earnings on Tuesday, highlighted its relatively low share of US “TV time” in its letter to shareholders in a preview of likely arguments it will make to regulators.
“The entertainment business remains vibrant and intensely competitive,” Netflix said. It singled out YouTube, Amazon and Paramount+ as examples of how TV consumption patterns were “blurring”.
The letter came hours after the company amended its offer for WBD to all cash, in an effort to thwart a hostile bid from Paramount. Netflix did not increase its bid, which values the business at $82.7bn including debt.
The combination of Warner’s HBO Max service and Netflix would put the company over the 30 per cent US market share threshold. But Netflix is expected to argue that other streaming services, including YouTube, should be considered when surveying the marketplace.
US President Donald Trump said in December that Netflix’s “very big market share” could pose a problem as it seeks regulatory approval for its blockbuster deal.
The streaming group on Tuesday reported net income of $2.4bn, or 56 cents per share, on revenue of $12bn in the fourth quarter — results that were slightly ahead of Wall Street forecasts. Quarterly earnings were up 29 per cent compared to the same period in 2024.
In the most recent quarter, Netflix surpassed 325mn subscribers after posting a massive hit with the finale of Stranger Things, which reached 120mn views. It also streamed the boxing match between Jake Paul and Anthony Joshua as well as NFL games at Christmas.
The company said expenses related to the WBD deal totalled $275mn, bringing its operating margin in 2025 to 29.5 per cent on revenue of $45.2bn
The company forecast that it would bring in $50.7bn-$51.7bn in 2026 with its margin expected to rise to 31.5 per cent.
Shares were down 4.8 per cent in after-hours trading.