At the end of 2025, Netflix was poised to complete a blockbuster deal: acquiring a major Hollywood studio. But in February, in a shocking reversal, the streaming giant walked away from its $82.7 billion bid to acquire Warner Bros. Discovery after refusing to counter Paramount Skydance’s revised offer of $111 billion. “We thought of Warner as a really exciting opportunity,” says Netflix co-CEO Greg Peters. “But just like in all the other cases, we size the opportunity based on the value back to our members in the business—and when someone's willing to go with a number that's bigger than that value to us, we say, ‘Great, good luck, and Godspeed.” The move—which resulted in a $2.8 billion termination fee from Paramount—was hardly an indication of weakness: in 2025, Netflix delivered $45.2 billion in revenue (up 16% from 2024) and surpassed 325 million global paid subscribers. 

That number will likely continue to grow as the company doubles down on investing in live sports and events, partnerships with prominent podcasters and content creators, games, and AI-powered discovery, search, advertising, and creation tools—including, in March, an acquisition of Ben Affleck's AI filmmaking company InterPositive. Peters says Netflix’s ability to play in both the creative and tech spaces is what gives the company its edge. “They can be as good as us in one,” he says of competitors. “But being as good in both is tough.”

Peters spoke with TIME in April about walking away from the Warner Bros. Discovery deal and Netflix’s path to continued growth.

This interview has been condensed and edited for clarity.

Let’s start with the obvious: Netflix explored a major acquisition of Warner Bros. Discovery and ultimately walked away. What did that episode clarify for you about what Netflix should—and shouldn’t—be as it considers its future and areas for growth?

I would say we thought of this [deal] as just one of many mechanisms for growth. Most of our businesses involve adding more entertainment value for our members. We can produce content, we can license content, we can partner with people—as you may have seen us doing in Korea with SBS or in France with TF1—or, somewhat more rarely and somewhat more exotically, you can buy a company as a way to get to growth.

We thought of Warner as a really exciting opportunity—incredible IP, HBO as a brand—[and] we thought we would have been amazing stewards of those properties, and [that] it would have been great for the business. But, just like in all those other cases, we size the opportunity based on the value back to our members in the business. And when someone's willing to go with a number that's bigger than that value to us, we say, “Great, good luck, and Godspeed.”

Would the company pursue an acquisition of this scale in the future?

I would say, if a similar opportunity came up—where, again, we did the work and we thought it made sense—then certainly, it would be our responsibility to go pursue something that we thought was the right thing to do. That doesn't happen often; these are pretty rare occurrences.

Since launching in 2022, Netflix’s ad tier has become a core growth engine for the company. What steps did the company take to make that shift successful?

We really tried to do it in earnest and make it as effective as fast as we possibly could. Part of that was launching with a partner and really taking time to get the consumer experience right. That's the foundation; that's the starting point. 

A big benefit of this is that, with an ads plan, you get to have a lower consumer price, and that means more people on the planet think that exchange is a better option for them. Fundamentally, we looked at this as more choice, more options for consumers… it expands our audience, which is great. And then, of course, we work to close the revenue gap with the brands and advertisers. And that's a real big fundamental change since we've launched—we're now on our own ad stack. That's something we completed in 2025, so it's exciting to be in that place, because now we are sort of in our sweet spot…we're able to think about innovation and changing what that model looks like. 

Our real core thesis, here, is that we get to bring what is amazing about digital advertising from a brand or advertiser perspective—effectiveness, measurement, targeting, personalization, all of those capabilities—but we're going to bring it into the creative space of television…these highly engaging, creative-forward formats.

How do you define creative-forward?

There's a component of this which is long-ish form—I’m using “long” in the advertising sense, so a 30-second digital ad—but a real interesting dimension of this is what I think we'll increasingly see. It's a small fraction right now, but I think it'll be increasing: how we're working with brands to bring a brand-forward narrative in the creative spot, but represented in the universe of the titles that it's going to go against. 

The Wendy's ads with Wednesday—that would be a good example of where we're doing that work that historically has been very difficult to do. It's hard to get to do that matching between the title creative and brand creative. But I would say the tools that we are building—and the advent of things like generative AI—will make that easier and easier to do.

Netflix is exploring AI-powered discovery, search, advertising, and creation tools, most recently with its acquisition of Ben Affleck’s InterPositive. In your view, what are the biggest opportunities for AI to drive growth? 

You hit the three areas that we're investing in. And I'd also say, just to check it off, we're going to do what I think every company is going to do, which is seek productivity enhancements in those other areas.

On the content creation side, we did complete this acquisition of InterPositive. And what we love about this is that it's very consistent with our thesis around how we're going to use these technologies to support creators. It’s not about some person sitting there with a prompt and saying, “Give me an amazing two-hour movie that’s going to wow people.” It just doesn't work that way. We don't see that as being a reality. But this is actually embedded in the process. You have creators, directors, shooting [in the traditional sense]…and then that comes into the model and starts to build a very title-specific set of tools and models that you can then start to do interesting things with, like transform existing shots. Maybe you want to change the color of the shirt that I'm wearing, or you want to remove wires from the scene. But it also allows you to do things like, if we were shooting this conversation in a multi-camera shot and we didn't get an angle that we wanted, we can actually, based on all the material that we have, generate that shot—but the fidelity and the accuracy and how that shot gets generated is consistent with the creative elements of it.

Netflix has increasingly struck high-profile deals with content creators, including podcasters, ostensibly to take on competitors like YouTube. What do you see as the future of this part of the business?

To some degree, this is an evolution of what we've always done. We've always tried to work with the greatest storytellers, the greatest content creators. And so what we're just recognizing is that some of those content creators have learned their craft and honed their craft on YouTube versus, let's say, a film school or working as a television broadcaster. 

Video podcasts, we almost see as an extension of the talk show on television. We want to make sure we're giving our members the opportunity to see those things on Netflix… and so we're going to go after those top storytellers. We think we have a pretty compelling model in terms of reach and the product experience we give. And then, overall, our monetization on a per-hour basis is better than YouTube, right? And so we think we should compete for those top storytellers.

Netflix has continued to invest in live sports and events; the company also hired veteran ESPN anchor Elle Duncan as its first live-sports host in December. In your view, what’s the long-term role of live sports and events on Netflix, and how do you decide where to stay disciplined versus lean in?

I go back to: live is the strategy. And then we fulfill that strategy through a variety of programming, some of which includes sports. We think that there's an opportunity to extend the kind of entertainment that we're giving to our members… Whether it's in the NFL Christmas games, or the Canelo Crawford fight, where we got to 41 million viewers around the world, 20 million in the United States—these are quite big moments where there’s real value in the shared experience.

Netflix has continued to increase pricing across tiers. How do you think about the ceiling of what consumers are willing to pay for?

I think we don't have an a priori on that. Our approach to this is that our job is to add more value to the offering we have to our members. And then our members essentially tell us when we've done that. We look at a bunch of different signals—around the engagement, the retention, what plans are they taking, churn, all those other factors. One thing we know—and we hear this very clearly from our members, both explicitly and implicitly in their behaviors on the service—is that they want more from us.

The way that we make that work, from the business perspective, is that we deliver more value. We occasionally ask them, “Hey, please pay a little bit more.” And then we keep that flywheel spinning because we can reinvest in more and more content.

How will Netflix continue to differentiate itself from competitors moving forward?

We've got a set of competitors that sit historically in that creative space. Disney's good at making things; Warner’s good at making things. We seek to be competitive and as good as them, but they are not as great on the tech side. The other set of competitors we have is maybe YouTube or Amazon. They tend to be pretty good at the technology and the product experience stuff, but maybe less good at the creative execution. 

Putting the two together is hard. These are two worlds that speak different languages, typically, and they think about things differently. But us being able to navigate that difficulty is essentially a competitive mode—because it's just harder for either competitor set to be as good as we seek to be about both. They can be as good as us in one, but being as good in both is tough.