Paramount handed Netflix a $2.8 billion breakup fee on Feb. 27 after outbidding the streaming giant for Warner Bros. Discovery. While Wall Street talks about buybacks and balance sheets, I want to talk about something more interesting.
Yes, that $2.8 billion handed to them by David Ellison and Co. is only a small part of Netflix’s annual content spend, as co-CEOs Ted Sarandos and Greg Peters noted when receiving the fee: “This year, we’ll invest approximately $20 billion in quality films and series and will expand our entertaining offering.”
But lets play out the logic of an extra $2.8 billion in this column. What happens if Netflix uses this windfall to crack the creator economy wide open? Despite its 325 million subscribers, there’s two problems that the streaming giant hasn’t yet solved:
Problem 1: Defending Its Churn Advantage
Netflix has remarkably low churn for a subscription product. But they’ve also reached a saturation point in their most important market. With U.S. growth slowing, the business model increasingly depends on keeping the subscribers they have. As competition intensifies and every streamer fights for the same wallets, that low churn rate will come under real pressure. The streamers that win the next decade won’t be the ones who acquire the most subscribers, they’ll be the ones who give people a reason to stay every single day. YouTube and podcasts do that effortlessly. They’re ambient, habitual, always-on. People don’t cancel YouTube because the algorithm never stops feeding them. Netflix needs that same daily gravitational pull before someone else builds it first.
Netflix owns primetime. But between 9 am and 5 pm? That territory has always belonged to linear TV, talk shows, YouTube and podcasts. Netflix CFO Spencer Neumann confirmed at a Morgan Stanley conference on March 4 that their podcast slate overindexes on morning and afternoon viewing and skews heavily toward mobile. That’s not a byproduct of the format, that’s the whole point. Video podcasts are Netflix’s first real attempt at a daytime programming block for the streaming era.
Both problems have the same solution: build the kind of content that people return to out of habit, not just hype. $2.8 billion is the war chest to do it.
So how does Netflix think of solving those two issues with that $2.8 billion? It should start looking to buy in to the video podcast boom much more than the early testing the waters deals it has made with the likes of Spotify, iHeart, Barstool and more.
After founding the podcast studio Parcast and selling to Spotify, I launched PAVE to be a modern media company that operates across platforms — from podcasts to YouTube and social distribution. My bet is that the most valuable players will own IP that travels across formats, connecting with loyal audiences on any screen. This isn’t about filling a gap someone else left behind. This is about Netflix doing what Netflix does better than anyone. Operating like a studio that owns IP, controls rights, and builds franchises.
When a platform becomes the place consumers go to find great content, something powerful happens. Creators show up. Great content follows. Consumers follow the content. A flywheel that compounds over time into an insurmountable advantage. The platforms that win this game don’t just accumulate content. They accumulate loyalty. And loyal users don’t churn.
Netflix already understands this in film and TV. The next move is applying that same muscle to podcasts. If Netflix is uniquely able to make IP more valuable, and they are, then the obvious answer is to own the IP. That means acquiring a creator-focused podcast studio. One that launches IP, holds the rights, thinks in franchises not episodes, and has deep talent relationships baked in.
And here’s what makes the acquisition the right move over simply hiring into the space: the right podcast studio doesn’t just bring content and IP. It brings operators who already know how the creator economy works. People who understand how audiences are built from scratch, how talent relationships actually function, and how to move at the speed creators expect. You can’t hire your way into that institutional knowledge. You have to acquire it.
The target isn’t another prestige drama or Hollywood IP. It’s studios and talent with loyal, habitual audiences and the people who know how to keep growing them.
License the Icons. Build the Roster.
Think about what Netflix did with docs and stand-up comedy when they went out and bought the best talent in those formats. Now apply that logic to the creator economy.
Alex Cooper is your Jimmy Fallon. Mel Robbins is your Oprah. Diary of a CEO is your Larry King. These creators have already spent years building audiences in the tens of millions who trust them, follow them, and consume everything they make. Netflix doesn’t need to build that trust from scratch. They need to license it exclusively.
Identify the creators who have genuinely broken through at scale across true crime, wellness, business, culture, and comedy. Make them a deal that brings their next chapter exclusively to Netflix. The audience follows. They always follow the creator.
Creators Trained Their Audiences to Accept Ads. Netflix Should Capitalize On That.
When I was at Spotify, we had this conversation more than once. The question was simple. Will subscribers who are paying for an ad-free experience still accept ads inside podcast content?
The answer, every single time, was yes. Because creator content doesn’t feel like an interruption. The audience expectation is already baked in before they press play. They trust the host. They welcome the read. That’s not advertising. That’s part of the show.
That dynamic unlocks ad revenue across both of Netflix’s tiers simultaneously. On the ad-supported tier, creator content becomes the highest-trust, highest-engagement inventory on the platform. On the ad-free tier, host-read integrations and creator-led sponsorships live inside the content itself, exactly the way they do on every major podcast today, and subscribers never feel like the experience has been compromised.
Netflix stops thinking about its two tiers as ad versus no ad and starts thinking about both as monetizable. They already do this with live sports. Creator content works the same way.
Bringing creators onto Netflix dramatically expands ad inventory with content that is inherently monetization-friendly, at exactly the moment their ad-supported tier needs scale and depth. But you can’t maximize that inventory with traditional ad tech. The logical next move is acquiring a creator-native ad network. One that already speaks the language of host-read integrations, brand partnerships, and creator-led sponsorships. Acquire that capability. That’s how Netflix goes from selling CPMs on dramas to owning an entirely new premium ad category.
Build a Slate of Vertical Video Programming
The final piece is native mobile. Netflix has largely ignored the format that dominates the phone of anyone under 35. The last company that tried to crack this at scale became the punchline of the entire media industry.
Quibi wasn’t a bad idea. It was a bad idea at the wrong time. They tried to build a new behavior from scratch with no distribution flywheel, no creator ecosystem, and no organic discovery engine behind it.
But the format itself? The format was right. Short-form, mobile-first, portrait-orientation content is exactly what the next generation of subscribers wants. They just want it from creators they already follow, on a platform they already trust.
That’s the difference. Commission a dedicated slate of vertical programming across travel, food, sports docs, cultural commentary, and true crime. Content built for 8-minute windows on a commute, not 45-minute episodes on a television. Let the creators who already own these audiences lead it.
Quibi proved the market wasn’t ready. Netflix can prove the market was just waiting for the right company to do it properly.
Netflix’s real competition isn’t Paramount or Disney+. It’s human attention. And right now, YouTube is winning more daily hours of that attention than any streaming service on the planet.
The creator economy isn’t a trend. It’s the infrastructure of modern media consumption. Always-on, creator-driven content is what keeps people inside a platform, not just visiting it. Netflix has that $2.8 billion, the best studio infrastructure in the world, and the most sophisticated consumer data on the planet.
The only question is whether they’re bold enough to use all three together.
Is Netflix sitting on a generational opportunity, or will they play it safe?
Before launching PAVE Studios, Max Cutler built and sold Parcast Studios to Spotify, then spent years as the platform’s VP brokering defining deals with Alex Cooper, Emma Chamberlain and more. PAVE Studios includes brands Crime House and OpenMind.
