Netflix turns to ads and content growth after failed Warner bid

Netflix headed into earnings with Wall Street focused on whether advertising and tighter content spending could replace the growth path it lost when the Warner Bros Discovery bid fell apart. The quarterly report, due Thursday, was set to be Netflix’s first since it walked away from the Warner Bros effort, and investors were watching for signs that the company could keep building momentum without the franchises it might have gained, including Game of Thrones and Friends.

Analysts expected Netflix to report first-quarter revenue of about $12.18 billion, up 15.5% from a year earlier, with roughly $634 million tied to advertising. That put the ad-supported tier at the center of the company’s next phase. Netflix raised prices in the U.S. in March, a move that could push more viewers toward cheaper plans with ads and give the company more room to grow without relying only on subscription increases.

The shift also reflects a broader change in what Netflix is trying to be. Along with series and films, the company has been leaning into live events, including sports and concerts, as it works to present itself less as a pure streaming library and more as a diversified entertainment platform with multiple ways to make money. That mix matters because Netflix no longer has Warner Bros assets as a shortcut to scale up its content strategy. Instead, it has to prove that its own programming slate, pricing strategy and advertising business can keep pulling in revenue on their own.

The competitive backdrop is getting tougher as well. If a proposed Warner Bros-Paramount Skydance combination closes, Netflix would face a larger rival with more scale and a deeper content arsenal. That makes the stakes higher for every part of Netflix’s strategy, from how many ads it can sell to how aggressively it funds originals. Investors will be listening closely for evidence that ad growth, premium pricing and disciplined content spending can still support the company’s expansion, even after the Warner deal disappeared.