Decision-Making Consequences
We learned recently that Warner Brothers will have an important decision to make regarding the bids from both Netflix for $82 Billion or Paramount for $108 Billion.
I have to wonder how the decision-making process is unfolding and if they are looking back to history for any insights.
The cost of not measuring the RIGHT data can be described well using the Blockbuster and Netflix example. Known for a Strategic Foresight failure…but I would also say a failure to ask the right question and gather the right data.
Around 2000 one of Netflix founders Reed Hastings approached Blockbuster with an offer to acquire Netflix (or a large stake) for around $50M.
At the time, then CEO John Antioco declined the offer, and reportedly laughed Reed Hastings out of the room, using the reasoning that the physical rental business was superior and the internet was not popular enough to support a belief that streaming services had a future...The Business was unproven and they didn’t take the time to understand the real value and threat of the internet.
At that time, Blockbuster had nearly $5 Billion in annual revenue and in 2000 specifically nearly $800 million of that revenue was being generated from Late Fees. (Turns out cashing in on a customer pinch point is not a great long term decision for Value Creation)
Netflix, as we know, innovated on many of those customer pinch points, as well as embracing new technology, and as of today, Netflix market cap is around $500 - $550 Billion dollars.
Now in 2025 Netflix is chasing down Warner Bros with an offer to buy the most historical and coveted IP treasure trove for $82 Billion dollars.
Paramount joined the fun with a hostile takeover bid of $108 Billion dollars.
So Netflix is again at a crossroads, and Warner Brothers has to make a decision (courts withstanding) that was similar to Netflix in 2000.
Do they accept an offer from Netflix and streamline into a more future proof model?…
Or do they take the Paramount offer and maintain traditional theatrical models, joining forces with other “David’s” to take on the Goliath of Netflix?
What decision-drivers and data-points would YOU gather?