Netflix’s U-Turn & Illumina’s Holy Grail

Happy Labor Day, and welcome back to Dry Powder, arriving a little later this week on account of the holiday.
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Happy Labor Day, and welcome back to Dry Powder, arriving a little later this week on account of the holiday.

For today’s email, I debated my Puck partner Matt Belloni about the wisdom of Netflix’s new ad-supported tier, Dan Loeb’s plans for Disney, and whether John Stankey got the better of David Zaslav. Plus a few observations on the defenestration of Brian Stelter at CNN and whatever M&A strategery Brian Roberts has got cooking.

But first, a few thoughts on Illumina beating the Biden administration’s antitrust case against its $7.1 billion acquisition of the cancer-detection startup Grail…

Illumina’s Holy Grail

Illumina’s victory over the Federal Trade Commission this week may yet be a situation in which the company wins the battle but then loses the war. As I reported last year, Illumina C.E.O. Francis deSouza took an unprecedented risk...

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Netflix’s U-Turn & the Next CNN Purge

The real conversation inside Hollywood and Wall Street about Reed and Ted’s ad-tier about-face, Zaslav’s narrative heel-turn, Chapek’s ESPN dilemma, and the long arm of John Malone.

WILLIAM D. COHAN

Matt Belloni: Happy Labor Day, Bill, I’m betting Nantucket is slightly less scorching hot than L.A. Anyway, the debate in entertainment this fall—well, besides whether Black Panther 2 will outgross Avatar 2—will be whether Netflix and Disney+ can successfully launch an ad-supported model. Both will likely offer the ad tier with a price point in the $8 range, much less than the no-ads service. So both Disney’s Bob Chapek and Netflix’s Reed Hastings and Ted Sarandos are hoping that the loss of that subscription revenue can be made up with juiced subscriber numbers and all that ad cash. What’s the current thinking on Wall Street about whether that feat is possible?

William D. Cohan: Wall Street sees the ad-supported layer as a revenue opportunity for both companies, for sure. How much remains to be seen, though the reported $65 per 1,000 views that Netflix is asking for ads is indeed aggressive. The question is...

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