Netflix Just Got an Extra $2.8 Billion. Here’s What It Should Spend On

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…