After I wrote about a hypothetical Netflix–NBCUniversal deal a number of people told me some version of: “The prospect of Netflix acquiring NBCUniversal is really interesting.” Which made me realize I apparently hadn’t explained the idea very well.

I don’t think Netflix should acquire NBCUniversal. In fact, much of what made the hypothetical interesting was precisely that it wouldn’t.

The idea was to separate the things Netflix might be uniquely positioned to make more valuable (IP, streaming distribution, consumer relationship, etc.) from the creative institutions that actually make movies and television. Netflix could acquire Peacock and selected Universal IP, potentially through a jointly owned IP vehicle, while Universal Pictures, DreamWorks, Illumination and Universal Experiences remain outside Netflix.

And then Netflix somewhat demonstrated the model. Not in movies, but in gaming.

Netflix’s GTA lesson

Netflix has spent years trying to build a gaming business. It acquired studios, hired developers and attempted to turn games into another vertically integrated Netflix capability. That hasn’t gone particularly well. Netflix has steadily retreated from some of those ambitions, including closing studios and moving away from its earlier AAA strategy.

Then Rockstar did something fascinating. It premiered an extended look at GTA VI on Netflix before releasing it on YouTube. For a brief period, one of the most anticipated entertainment properties in the world became a Netflix event.

I would have loved for Netflix’s gaming investments to leave it with ownership stakes in valuable gaming IP. But that’s very different from believing Netflix itself needs to become a great game developer.

Netflix’s structural advantage isn’t creating everything people want to consume. It is making great things other people create dramatically more valuable. Ideally while finding ways to participate in that appreciation which has been largely missing so far.

Which brings me back to Universal.

What the Universal deal was actually supposed to be

Imagine Netflix acquires Peacock and selected Universal IP. Perhaps the IP sits in a Netflix-controlled or jointly owned vehicle in which NBCUniversal retains a meaningful economic interest. Combine this with a participation option in future IP coming from the Universal ecosystem.

But Netflix doesn’t acquire Universal Pictures. Universal can still make the next Jurassic movie. It can still distribute it theatrically. DreamWorks remains DreamWorks. Illumination remains Illumination. Universal Experiences continues building theme parks and attractions.

Netflix gets something it is exceptionally well positioned to exploit: ownership and participation in IP that can travel across hundreds of millions of households, streaming, advertising, games, merchandise and potentially other forms of entertainment.

NBCUniversal gets a significant amount of capital while retaining the businesses where it has structural advantages. It can pour some of those proceeds into Universal Experiences, where greater global exposure to the underlying franchises should make its parks even more valuable. And it can reinvest in Universal, DreamWorks and Illumination to create the next generation of IP.

Netflix doesn’t need to own the factory. It needs exposure to more of what comes out of it.

And Warner could have worked the same way

The same architecture could have applied to the Warner Bros. Discovery transaction. Instead of acquiring Warner Bros. itself, Netflix could have acquired HBO Max and selected Warner, HBO and DC IP, again potentially through some form of IP vehicle.

Warner Bros. could have remained an independent movie and television studio and theatrical distributor. Discovery’s cable networks could have remained separate. Warner could continue producing movies around IP owned or co-owned by Netflix under long-term production and distribution arrangements.

And Warner would suddenly have billions of dollars to reinvest in the thing Warner is actually very good at: creating entertainment. Movies. Television. HBO. Talent. New franchises. The studios get more capital to create the next thing Netflix might eventually want a piece of.

California made the structure more interesting

This became particularly relevant after California Attorney General Rob Bonta clarified what his office wants from Paramount’s proposed acquisition of Warner Bros. Discovery.

California has identified three problematic markets: wide-release theatrical film distribution, blockbuster theatrical film distribution and basic-cable channel licensing. Bonta has now explicitly said his office is willing to listen if Paramount proposes a structural remedy for each. That is awkward for Paramount because the obvious structural remedies start cutting into the thing it is trying to buy.

But look at our hypothetical Netflix structure.

Universal Pictures remains an independent theatrical distributor. Warner Bros. remains an independent theatrical distributor. Their creative organizations remain intact. The legacy cable networks don’t need to move to Netflix.

There would obviously still be significant antitrust questions around Netflix’s scale, streaming, content ownership and bargaining power. But against the specific structural issues California has identified in Paramount–Warner, there is an important difference.

Netflix wouldn’t promise to preserve the independent studio. It would leave the studio independent. And that isn’t merely a regulatory concession, it might actually make the economics better.

The 10 or 12 decisions that matter

There is an idea attributed to Michael Eisner that I’ve always loved: The basic concept is that running a movie studio ultimately comes down to something like 10 or 12 really important decisions a year: Which movies do we make?

Everything else matters, obviously. Production. Marketing. Distribution. Cost control. But get those handful of greenlight decisions consistently wrong and none of the machinery saves you.

Eisner had seen this firsthand at Paramount before Disney. And Disney later encountered another version of the same lesson with Pixar.

What Disney was buying with Pixar wasn’t merely Toy Story, Finding Nemo and The Incredibles. It was an institution capable of repeatedly deciding which movies should exist and then making them extraordinarily well. Preserving Pixar as Pixar mattered because the culture and decision-making system were themselves part of the asset.

The same logic should make us skeptical of assuming that every successful creative institution becomes more valuable when folded into a larger one. Warner has a way of making decisions. Universal has one. HBO has one. DreamWorks has one. Illumination has one. They attract different talent, develop different ideas and make different bets.

Netflix has something those institutions don’t: an extraordinary global view of entertainment consumption. It can see what hundreds of millions of households start, finish, revisit and discover; how tastes intersect; and how entertainment travels between countries and audiences.

That information could make those 10 or 12 decisions better informed. It doesn’t follow that Netflix should make them. Netflix should follow a simple principle: Centralize what benefits from scale. Decentralize what benefits from judgment.

· IP ownership, global distribution, audience data and monetization benefit enormously from scale.

· Creative judgment, talent relationships, development and culture may benefit enormously from independence.

Why Paramount can’t simply do the same thing

This raises an obvious question. If this structure is so clever, why couldn’t David Ellison solve his California problem by doing something similar? Because Paramount doesn’t have Netflix’s structural advantage.

Moving Harry Potter from Warner’s balance sheet onto Paramount’s balance sheet doesn’t suddenly expose Harry Potter to hundreds of millions of new households or place it inside a dramatically more sophisticated global discovery engine.

Paramount needs Warner in ways Netflix doesn’t. It needs the scale, streaming subscribers, studio operations, library, distribution and cost synergies created by putting the companies together.

Netflix already has scale. What it increasingly needs are more ways to benefit economically from everything that scale can amplify.

That is why Netflix can potentially separate ownership from creation in a way Paramount cannot. It can leave the creative institution independent because the source of the arbitrage sits elsewhere.

Service or platform?

Which brings us back to GTA VI. Netflix tried building more of the creative capability itself. Now Rockstar is demonstrating another role Netflix can play: distribution platform for someone else’s enormously valuable IP.

And games aren’t the only evidence.

Universal movies increasingly flow to Netflix after their Peacock windows. In France, Netflix is becoming the streaming home for programming from TF1. Netflix has reportedly discussed integrating third-party services such as Peacock and Fox One and even debated hiring someone to oversee these partnerships.

Is Netflix a service or a platform?

If Netflix ultimately decides it is a platform, the transaction architecture becomes considerably more interesting. Netflix doesn’t need to own every studio, every streaming service or even every piece of content.

It needs to own the consumer relationship, the data, and the distribution.

And where its distribution creates disproportionate value, it should find ways to participate in the IP economics.

Let Rockstar make GTA. Let Warner make Warner movies. Let Universal make Universal movies. Let Illumination make Illumination movies. Netflix can concentrate on becoming the best place in the world to turn those creations into global franchises.

That could produce a remarkably powerful company. Netflix could become more than the world’s largest streaming service. It could become the dominant platform for premium entertainment while owning stakes in some of the IP its platform makes more valuable, without destroying the independent creative institutions Hollywood depends upon.

But even that might not be enough.

Because while Netflix has spent the last twenty years building the world’s most powerful premium streaming service and is now contemplating whether it should become a platform, another company started as a platform.

And it already has more content, more creators and one of the most extraordinary datasets on human attention ever assembled.

The real fight isn’t Netflix versus Paramount, it’s Netflix versus YouTube

I ended the last issue with a question: if Netflix and Comcast ever pursued anything resembling the Universal structure I proposed (Netflix taking Peacock and selected IP while Universal Pictures, DreamWorks, Illumination and Universal Experiences remain intact) it could potentially derail David Ellison’s deal.

And an alternative like that would be a painful reality for Paramount. Because right now, David Ellison has a California problem.

Ellison Needs Bonta More Than Bonta Needs Ellison

Paramount has cleared its Warner Bros. Discovery acquisition with every authority except the states (I didn’t expect international to be as smooth tbh). California Attorney General Rob Bonta appears to be in no particular hurry to negotiate. The trial is still months away. That delay is uncomfortable for Bonta. It is considerably more uncomfortable for Ellison.

Ellison has responded by increasing the pressure. He issued a threat to move Paramount Skydance out of California if Bonta doesn’t settle, prompting Bonta to call the threat blackmail. Paramount has also returned to the question of requiring a bond despite the judge having already made pretty clear that wasn’t going to happen.

I’m not sure either tactic makes Ellison’s position easier.

There is, however, a legitimate argument underneath the frustration. Delay is bad for both Paramount and Warner. Management is dealing with litigation, regulators, financing and integration planning for a corporate structure it cannot actually implement. Every additional month consumes attention that should be going toward making movies, fixing businesses, building franchises and figuring out how to compete with Netflix, YouTube, Amazon and everyone else.

So Ellison is right that limbo has a cost. But that doesn’t necessarily mean Bonta should approve the transaction faster.

It might mean Ellison needs to give him something meaningful enough to end it.

What Does Bonta Actually Want?

The easiest path is some package of behavioral remedies. Paramount can promise California production spending, jobs, theatrical releases, investment in facilities or protections for creative output. Those commitments can matter, but ultimately they are just promises about how a much larger combined company will behave.

Bonta can ask for something harder: a structural remedy. Instead of telling Paramount what it must do after buying Warner, a structural remedy changes what Paramount is allowed to buy or keep in the first place. That could mean divesting a business, a studio asset, streaming assets or valuable IP.

Which raises a much more interesting question: Does Paramount actually need to own every piece of Warner for the deal to work? And that takes us straight back to the last issue.

What If Netflix and Comcast Were Actually Talking?

We just spent an entire newsletter arguing that these pieces don’t necessarily have to stay together. Universal Pictures can make a Jurassic movie without owning Jurassic. Universal Experiences already builds extraordinary attractions around Harry Potter and Nintendo without owning either franchise. Netflix can provide distribution, capital and audience intelligence without becoming the studio making every movie.

Separating the pieces therefore doesn’t inherently destroy the ecosystem. Under the right structure, it might actually make the individual pieces more valuable.

Now imagine Netflix and Comcast were actually discussing something resembling the transaction I proposed (which you can find here The Netflix-Universal Deal). Although I have absolutely no reason to believe they are.

If they were, Bonta suddenly isn’t evaluating Paramount–Warner against a world where the only alternative is leaving two increasingly challenged legacy media companies alone. He has another potential architecture for Hollywood: Netflix puts enormous capital and global distribution behind premium IP while Universal Pictures, DreamWorks and Illumination remain intact as creative institutions.

That would be a pretty powerful counterargument to one of the central narratives surrounding Paramount–Warner.

Ari Emanuel has been particularly vocal in arguing that Netflix is bad for Hollywood while Ellison represents an owner willing to invest in theatrical movies, production and the traditional entertainment ecosystem. I understand the argument. If the choice is between Netflix absorbing Hollywood and Ellison investing in it, Paramount has a compelling story.

But our Universal structure changes the choice. Netflix wouldn’t be buying Universal Pictures and turning it into Netflix Studios. Universal Pictures stays Universal Pictures. DreamWorks stays DreamWorks. Illumination stays Illumination. Theatrical distribution survives. Netflix owns or participates in selected IP because its platform can make those assets disproportionately more valuable, while the institutions creating the next generation of entertainment remain intact.

The company Hollywood spent a decade blaming for disrupting the studio system suddenly has a model that could actually help preserve it.

And if that alternative were remotely credible, I think it could genuinely derail Paramount’s deal. Not because Netflix necessarily outbids Ellison for Warner, but because Bonta can suddenly ask: If there is another way to strengthen these assets without putting Paramount and Warner under the same owner, why should California accept full consolidation?

Netflix–Universal wouldn’t even have to close. Serious discussions could be enough to change the negotiating leverage.

Paramount Can’t Do the Same Thing

The Universal structure works because Netflix brings something unusual to it: more than 300 million global subscribers, enormous engagement, a recommendation and discovery infrastructure built over decades and increasingly rich behavioral data around how audiences interact with entertainment. Add gaming, merchandise and advertising and Netflix can potentially do more than distribute Shrek or Jurassic. It can help compound the value of the underlying franchise.

Paramount doesn’t have that.

Paramount+ is simply too small for the same arbitrage to work. Separating valuable Warner IP and relying on Paramount+ to create more value around it misses the entire economic logic of the Netflix structure.

So Paramount cannot simply copy last week’s deal. Which brings us back to structural remedies.

So What Can Paramount Actually Give Up?

You could make Paramount sell some Warner IP. Netflix might even be a logical buyer. But moving Harry Potter from Paramount’s balance sheet to Netflix’s doesn’t preserve another studio. It also creates an obvious question: who makes the next Harry Potter?

You could instead require Paramount to divest Warner Bros. itself. That certainly preserves another studio, another buyer of scripts and another competitor for talent. But if Warner leaves with enough IP and creative capability to remain viable, what exactly is Ellison paying all this money to acquire?

Sell too little and you may not solve the problem. Sell too much and you destroy the rationale for the deal.

Which leaves a third bucket that may be considerably more interesting: cable.

Before Paramount arrived, WBD had already designed a separation. Warner Bros., HBO, HBO Max, DC and the studio businesses would sit on one side. CNN, TNT Sports, Discovery, HGTV, Food Network, TLC, TBS and much of the traditional linear portfolio would sit on the other.

Maybe that old breakup suddenly becomes useful again. If Ellison’s thesis is fundamentally about Warner Bros., HBO, DC, streaming scale and premium IP, how much of that legacy cable portfolio does Paramount actually need?

Those networks still generate audiences and cash flow, so removing them would obviously change the economics and financing of the acquisition.

CNN creates additional friction. It is a global news brand with enormous reach, political relevance and strategic influence that would be extremely difficult to recreate. I can understand why Ellison might view CNN very differently from Discovery, HGTV, Food Network, TLC or TBS… for more on that part read my thoughts from last December here Paramount's Political Clout

But that actually sharpens the question. If CNN is strategically important, and Warner Bros., HBO and DC are central to the entertainment thesis, how much of everything else does Paramount really need?

Which Warner Does Ellison Get?

There may be no painless structural remedy.

Selling IP may accomplish too little. Selling Warner Bros. may remove too much. Selling a meaningful portion of cable may be strategically tolerable but financially painful.

And all the while, time is working against Ellison. Every additional month delays integration and consumes management attention while Bonta has considerably less reason to rush.

That is why the Netflix–Universal thought experiment matters even if Netflix never buys a single Warner asset. Last week’s argument challenged the assumption underlying much of legacy media consolidation: that the studio, IP, streaming platform, distribution system and physical exploitation of a franchise necessarily have to share one owner.

If Netflix and Comcast were actually pursuing that alternative, the pressure on Paramount would become considerably greater.

Paramount has spent a lot of time explaining why buying Warner makes sense. California may ultimately force it to answer a much harder question: Why does Paramount need to own all of Warner?

Maybe Netflix derails the deal. Maybe Bonta settles. Maybe Ellison finds a structural concession everyone can live with. My personal bet is on a cable divesture while keeping CNN and a restructuring of the financing. They need the studio, they need the IP and they need CNN. Anyone else would need cable to cash flow the deal but financing is the one key variable that the Ellison’s have most control over.

While I love the Netflix-Universal deal structure I believe Paramount will ultimately get Warner. Just not all of Warner.

Over the last two weeks, I’ve argued two things that might initially sound contradictory. First, Netflix has already won the streaming war (excluding YouTube…we will get to this). Its next opportunity is becoming something larger: the platform where more of entertainment lives, whether Netflix owns that entertainment or not.

Then I argued that Hollywood learned the wrong lesson from Disney. Disney’s extraordinary success convinced an entire industry that the answer was vertical integration. Own the studio, own the IP, own the distribution, own the customer relationship, own the experiences, connect everything together and wait for the flywheel to spin.

Disney can do that because Disney spent generations building a company where those pieces actually reinforce one another. That doesn’t mean everyone else should.

Which brings me back to the transaction I teased at the end of the last issue.

I don’t think Netflix should buy Universal.

I think Netflix should buy the parts of Universal that become substantially more valuable inside Netflix, while Comcast keeps the capabilities that are more valuable exactly where they are. That means Netflix acquires Peacock and a large portion of Universal’s strategic entertainment IP and library rights. Comcast keeps Universal Pictures, DreamWorks, Illumination, Universal Television, NBC, NBC Sports and Universal Experiences. Then you reconnect the pieces contractually.

It sounds more complicated than a merger. I think that complication is where the value is.

Let’s Start With Rupert Murdoch

There is a useful precedent for thinking about this.

In 2017, Rupert Murdoch looked at 21st Century Fox and essentially decided that having good entertainment assets was no longer enough. Competing with Netflix would require enormous scale, technology investment and an entirely new direct-to-consumer capability. Rather than try to turn Fox into something it wasn’t, he sold most of the entertainment assets to Disney while keeping the businesses he believed had stronger standalone economics, including news, sports and broadcast.

What makes that transaction interesting in retrospect is not simply that Murdoch sold. It is that the same assets could rationally be worth different amounts to different owners. X-Men was valuable to Fox. Put Wolverine, Deadpool and Fantastic Four back inside Marvel and those assets could become substantially more valuable to Disney. Disney could justify paying a premium because it could extract synergies Fox could. Comcast then entered the bidding, pushing Disney’s original $52 billion offer to $71.3 billion and transferring even more of that potential synergy to Fox shareholders.

Disney probably overpaid, which is an important distinction. A strategic arbitrage can exist and still become a bad deal at the wrong price. But Murdoch’s underlying insight was right: a good asset does not necessarily have the same value under every owner.

I think Comcast is sitting on a similar opportunity.

Peacock is the most obvious example. It recently became profitable, which makes the decision more interesting, not less. The question is no longer whether Comcast needs to get rid of a money-losing streaming experiment. The question is whether a profitable Peacock is worth more as another standalone streaming platform or as part of Netflix.

I struggle to see the structural advantage in the former. Netflix already has the global distribution, recommendation infrastructure, advertising platform and customer relationship Peacock is spending billions trying to build. Folding Peacock into Netflix brings subscribers, advertising inventory, live programming and content into an infrastructure that already exists, while Comcast gets paid for something another owner can plausibly make more valuable.

But I wouldn’t sell NBC, NBC Sports or Universal Television with it. NBC still has enormous value as a broadcast network. NBC Sports has production capabilities and rights expertise Netflix does not need to recreate. Universal Television can remain a meaningful buyer of scripts, talent and projects and sell programming wherever the economics make sense. Netflix can become a much larger digital distribution partner without owning every institution producing the content.

That separation becomes even more important when we get to the real prize.

The Bigger Prize Is the IP

Netflix has become extraordinarily good at creating hits. It has been less consistent at creating assets whose value compounds for generations. A huge first season and a durable franchise are not the same economic thing. Universal, by contrast, is sitting on decades of franchise durability: Jurassic, Shrek, Minions, Kung Fu Panda, How to Train Your Dragon, Fast & Furious, the Universal Monsters and more. These are not simply movies people once watched. They are assets capable of producing movies, games, merchandise, licensing and physical experiences decades after the original creative act.

The obvious response is: why does Netflix need to own them? Why not just license them?

This is where I think the distinction between attention and durability matters.

Netflix’s new $500 million deal for The Walking Dead makes perfect sense because Netflix is essentially renting engagement. It wants hundreds of episodes people will watch now. Netflix does not need to determine what The Walking Dead should become in 2040.

But imagine Netflix spends the next decade introducing Shrek to new generations, building games around it, learning which characters resonate with which audiences, resurfacing older movies before new releases and using its global distribution machine to increase the value of the franchise. If Comcast still owns Shrek, Netflix has spent ten years making somebody else’s balance-sheet asset more valuable.

We have already seen a version of this with Formula 1. Drive to Survive helped introduce the sport to a huge new audience, particularly in America. Netflix benefited from the show, but Formula 1’s owners captured the appreciation of the underlying asset and remained free to sell increasingly valuable rights elsewhere. That is perfectly acceptable when Netflix wants programming. It is much less attractive when Netflix believes its platform can compound the value of an asset for thirty years.

That gives us a fairly simple rule: rent the things whose value you want to consume but own the things whose value you intend to compound.

There is an interesting wrinkle here that a podcast I admire (Acquired, go check it out) raises in its discussion of Disney. One argument for Disney+ was discoverability. If Frozen sits among thousands of titles on Netflix, Disney no longer controls how often families encounter it, potentially weakening the flywheel into merchandise, sequels and parks. I think that concern is real, but our transaction changes the incentive. Disney licensing Frozen to Netflix means Netflix is optimizing for Netflix. Netflix owning Shrek means every successful rediscovery of Shrek also increases the value of an asset Netflix owns.

There is another part of the discoverability argument I’m less convinced by. Disney content might represent a smaller percentage of someone’s viewing inside Netflix than it would in a cinema context, but media consumption itself has grown enormously. A smaller share of a much larger pool can still mean more consumption in absolute terms. Netflix doesn’t need Shrek to dominate someone’s media diet, it needs its global distribution machine to create more total Shrek viewing, discovery and fandom than Peacock could. If Netflix owns the asset, it also captures the value that additional consumption creates.

There is another shift happening here too. Disney has started experimenting with allowing fans to remix its IP through TikTok, which points toward a more participatory model of franchise building. Watching is only one way audiences can engage with a character or world. They can play with it, remix it, share it and eventually buy into it. For Netflix, that matters because its advantage is not simply the number of people it can put a movie in front of, but the amount of activity it can potentially generate around that IP. If Netflix owns the underlying asset, that participation becomes another way of compounding its value.

Netflix also has something Disney historically did not: the firehose. Disney’s traditional model was built around scarcity. Make a relatively small number of important things and monetize the winners for decades. Streaming demands almost the opposite. It needs a constant flow of programming to prevent churn, which creates an uncomfortable tension when the same premium franchises are also being asked to feed the streaming machine. Netflix already has abundance from reality, Korean drama, documentaries, licensed television, sports, creator content and everything else flowing through the platform. It doesn’t need Jurassic to produce something new every eighteen months. Netflix’s abundance could actually allow its most valuable IP to remain scarce.

Gaming makes ownership even more important. Netflix has been trying to build a meaningful gaming business for years, and Universal’s franchises arrive with something most games do not: existing worlds, characters and emotional familiarity. More importantly, gaming adds another behavioral layer to an already extraordinary amount of audience intelligence.

Viewing tells Netflix who watches Jurassic, where, how often and what else those audiences consume. Gaming can reveal which characters people choose, which environments they return to and how they actually participate in the world. Add merchandise, search, creator activity and eventually physical attendance and Netflix starts moving beyond a recommendation engine toward something much more interesting: a real-time franchise intelligence system that can help determine where to deploy capital across movies, games, consumer products and experiences.

But there is an important line here. Data should identify opportunity. It should not write the movie.

Buy the IP. Save the Studios.

This is where I think the structure becomes more interesting than Netflix simply buying NBCUniversal.

Disney’s history with Pixar is instructive. Pixar’s value wasn’t just Toy Story. It was the institution capable of creating Finding Nemo, The Incredibles, Cars and whatever came next. By the time Disney acquired Pixar for $7.4 billion, it was buying a creative system as much as a collection of copyrights.

Netflix should learn from that distinction rather than assume it needs to own DreamWorks or Illumination. DreamWorks should remain DreamWorks. Illumination should remain Illumination. Universal Pictures should remain a theatrical institution capable of working with filmmakers, producing movies and turning releases into cultural events. Netflix’s data can become an input into those organizations without Netflix becoming their creative director.

KPop Demon Hunters gives us a glimpse of how that can work. Sony Pictures Animation provided the creative production capability while Netflix provided the global distribution and audience relationship. Netflix did not need to own Sony Pictures Animation to create a cultural phenomenon (this is a gross generalization btw you can read more here KPDH Deep Dive)

KPop Demon Hunters also exposed the other side of the opportunity. Netflix created demand faster than it was prepared to monetize it, particularly in merchandise. Disney and Universal have spent decades building consumer-products and licensing machines around the idea that a hit movie is only the beginning of the economic opportunity. Netflix is still learning that muscle. Connecting its distribution and data advantage to Universal’s existing merchandise and licensing infrastructure gives the combined ecosystem a much better chance of being ready when the next unexpected phenomenon arrives. (Side note: This also proves that data is not everything, KPop Demon Hunters was a surprise hit even for Netflix).

The same logic applies after this deal. Netflix might own Jurassic, but Universal can remain the preferred producer and theatrical distributor of a new Jurassic movie. Universal brings the filmmaker relationships, production infrastructure, theatrical marketing and distribution expertise. Netflix gets the long-term appreciation of the underlying franchise and ultimately the streaming window. The theatrical release becomes an amplifier for Netflix’s franchise rather than something Netflix has to learn how to do itself.

There is an irony here. Netflix spent much of the last decade being cast as the company destroying Hollywood, yet this structure could turn it into something closer to a savior of the studio system. Netflix doesn’t need to own DreamWorks, Illumination or Universal Pictures to benefit from what they create. It needs an economic interest in the IP whose value its platform can compound. Leave the creative institutions independent, let them compete for talent and ideas, and Netflix can provide the capital and global distribution without turning every studio into Netflix Studios. In a strange way, the company that helped break Hollywood’s old economic model could help preserve some of the institutions that made it work.

Universal Experiences is even easier. Comcast should keep it. Universal already proves that owning the underlying copyright is not necessary to build an extraordinary physical business. It doesn’t own Harry Potter. It doesn’t own Nintendo. Yet Wizarding World and Super Nintendo World are among the strongest physical manifestations of either franchise. Universal needs durable rights to great IP, it does not necessarily need to own that IP.

That could work both ways. Universal licenses Shrek, Minions and Jurassic back from the Netflix-controlled IP company for parks and experiences, while Netflix can increasingly bring properties like Stranger Things, Wednesday, Squid Game and KPop Demon Hunters into Universal’s physical ecosystem. Universal has also been expanding into smaller-format concepts beyond giant destination parks, creating more ways to match different types of Netflix IP with different levels of physical investment.

Netflix gets a physical monetization engine without learning how to operate resorts. Universal gets access to one of the largest contemporary IP pipelines in entertainment. Neither has to own the other.

There is also a subtle regulatory argument here. Today, DreamWorks and Illumination are not independent IP sellers whose franchises Disney or Amazon can simply bid for. They already sit inside Comcast’s vertically integrated system: the studios create, Comcast owns the resulting IP, Universal distributes it, Peacock streams it and Universal Experiences can exploit it physically. Warner Bros. Discovery has essentially the same architecture: Warner Bros., HBO and DC create, WBD owns, Warner distributes, HBO Max streams, and WBD licenses the resulting franchises elsewhere.

Our model is therefore not primarily about Netflix roaming Hollywood and removing independently available IP from the market. It is about unbundling functions that already sit inside vertically integrated conglomerates. If anything it is a de-monopolization.

That distinction matters. DreamWorks can remain a creative institution even if Netflix owns or finances the IP it produces under an agreed structure. Universal Pictures can continue making movies. Universal Experiences can continue building attractions. The ownership, creation, distribution and physical exploitation of a franchise no longer have to sit on the same corporate balance sheet.

The Hard Part Is What Happens Next

There is still a problem. If Netflix buys Universal’s existing IP while DreamWorks and Illumination remain with Comcast, who owns the next Shrek?

Not literally the next Shrek, of course. Netflix would already own that franchise. The problem is the next thing DreamWorks creates that turns out to be worth billions.

If Netflix provides global distribution, capital, audience intelligence and perhaps gaming infrastructure that helps turn that new property into a franchise, but Comcast owns all of the appreciation, we have recreated the F1 problem. On the other hand, if Netflix simply buys DreamWorks and Illumination to solve that issue, we risk destroying precisely the creative independence the transaction was designed to preserve.

This is where I think an IP holding company becomes interesting.

Existing strategic Universal IP could move into a Netflix-controlled (or co-owned, none of the proposed means 100% to Netfliz) HoldCo. DreamWorks, Illumination and Universal remain creatively independent, but a pre-agreed financing and ownership mechanism gives the HoldCo a path to participate in future franchises. Maybe Netflix commits development capital in exchange for a right of first refusal. Maybe new IP enters the HoldCo under a predetermined valuation formula. Maybe Comcast retains an economic interest in the HoldCo so both sides participate in the upside.

The exact mechanics would matter enormously, and I’m not pretending to have solved them here. The important thing is aligning the incentives before the next franchise exists rather than negotiating over it after it becomes worth a cool couple of billion.

And once that architecture exists, Universal may not be the last place it could work.

If Paramount’s deal for Warner Bros. Discovery ultimately fails, WBD presents a remarkably similar opportunity. Warner Bros., HBO and DC are extraordinary creative institutions sitting inside another vertically integrated media company. Just like DreamWorks and Illumination today, they create the content, their parent owns the IP, and the rest of the corporate machine distributes and monetizes it. Netflix doesn’t necessarily need to swallow those institutions to own and compound selected IP. It could apply the same model: move strategic IP and digital distribution toward Netflix while preserving Warner Bros., HBO and DC Studios as creative institutions.

That could also complicate Paramount’s entire strategy. Paramount needs to justify buying the whole company. Netflix may only need the pieces that become disproportionately more valuable inside Netflix. If it can pay more for those assets while spending less overall, suddenly another giant vertically integrated media merger isn’t the only possible outcome for WBD.

There is an important limit to this idea, though. I originally wondered whether Nintendo could eventually fit into the same model. I don’t think it does. Nintendo is already both the creative engine and the IP-compounding machine: its games, hardware and characters make each other more valuable. Separating Mario from Nintendo could recreate exactly the incentive problem we are trying to solve. Universal and WBD are different because we are unbundling functions that already sit inside sprawling vertically integrated conglomerates, not stripping IP away from an independent creative company that is already exceptionally good at compounding it.

Maybe the next phase of media consolidation is therefore less about buying studios and more about deciding which pieces of the old vertically integrated conglomerates actually belong together. And if the Universal structure works, it might not just give Netflix a better deal than buying NBCUniversal. It could give Netflix an entirely different way to come back for Warner and derail Paramount in the process.

Appendix: The Back-of-the-Napkin Math

Ok, so I do have a day job so I don’t really have the time to run this as detailed as I’d love to, but to me conceptually it makes sense. This would be my first analysis gate before going deeper into a deal. Main question I’d ask is why would Comcast ever agree?

This is the question I expect to get the most pushback on. Universal is doing well. Peacock has finally become profitable. Experiences is growing. Why sell the IP now?

For the same reason Murdoch sold Fox: because a valuable asset can still be worth more to somebody else.

And since I first started working through this transaction, Netflix has actually given us a useful real-world benchmark for what that difference might be worth.

None of this is meant to be a formal valuation. I simply wanted to know whether the economic arbitrage we’ve been discussing is large enough to make the transaction plausible.

Netflix’s Warner offer gives us somewhere to start. Netflix agreed to value Warner Bros. at $82.7 billion of enterprise value. Our rough reconstruction suggests the public market had effectively been valuing the Warner assets at around $33 billion, or roughly 10x estimated 2026 EBITDA. Netflix also identified approximately $2.5 billion of annual cost synergies. Capitalize those synergies at the same 10x multiple and they represent another $25 billion of value.

That gets us to roughly $58 billion. Netflix was willing to pay $82.7 billion, leaving approximately $25 billion of additional strategic value.

I am not suggesting Netflix literally appraised Batman, Harry Potter and the Warner library at $25 billion. That residual also captures HBO, potential revenue synergies, subscriber benefits, strategic control and other advantages Netflix expects from putting Warner’s assets through its platform. But that is precisely what makes it useful for this exercise: it gives us a rough market proxy for the additional value a great portfolio of Hollywood IP, brands and library assets can have inside Netflix.

Now compare the portfolios. Warner has DC, Harry Potter, Game of Thrones, Looney Tunes and an extraordinary film and television library. Universal has Jurassic, Minions/Despicable Me, Shrek, Fast & Furious, How to Train Your Dragon, Kung Fu Panda and the DreamWorks and Illumination libraries. I would probably give Warner the edge at the very top of the portfolio, but Universal is hardly playing in a different league, particularly when you consider the strength of its family and animation franchises across movies, merchandise, gaming and experiences.

We don’t need to pretend the portfolios are identical. Haircut the Warner benchmark by 25% and the implied strategic premium for Universal still lands somewhere around $19–25 billion.

Here is where the math gets interesting. During the Warner bidding process, Comcast itself effectively valued NBCUniversal at roughly $81 billion. If Netflix were willing to pay $19–25 billion for the strategic IP, Comcast could therefore crystallize value equivalent to roughly 23–31% of NBCUniversal’s entire implied valuation without selling Universal Pictures, DreamWorks, Illumination, Universal Television or Universal Experiences.

Of course, Comcast would be giving something up. Universal Experiences would now have to license franchises it previously owned. But even that is worth putting on the back of the napkin.

Imagine the Experiences business eventually generates $10 billion of annual revenue and, purely for illustration, the effective royalty paid to the IP company averages 5%. That would be $500 million a year. Against $25 billion received upfront for the IP, that is the equivalent of 50 years of $500 million royalty payments, before even considering the time value of money.

That comparison is deliberately crude, actual licensing agreements would be franchise-specific and far more complicated, but the principle is not. Universal already pays for IP it does not own when the economics make sense. Harry Potter and Nintendo are proof that a theme park operator can create enormous value from licensed franchises without owning the underlying copyright.

There are obviously puts and takes underneath that calculation. Netflix wouldn’t necessarily need to own 100% of the IP HoldCo to capture the strategic benefit; Comcast could retain a minority interest and continue participating in the upside. NBCUniversal would also give up some of the licensing and merchandise economics it currently receives from owning those franchises outright, while paying royalties back to the IP company for certain uses. But the relationship creates new economics in the other direction as well. NBC and Universal Television can earn licensing revenue from programming distributed through Netflix, Universal continues earning production and theatrical economics, and broader Netflix exposure should increase the value of the merchandise and, more importantly, the attendance and spending generated by the parks. The exact allocation would need real modeling, but that is the larger point: there are losses on individual lines of the P&L, while the total ecosystem can still become substantially more valuable.

And we still haven’t included Peacock.

The $19–25 billion estimate above is our rough proxy for strategic/IP value. Peacock would have its own transaction value. So Comcast could potentially receive tens of billions for the IP plus whatever Netflix is willing to pay for Peacock and associated digital rights, while retaining the studios and Experiences business.

That is why I think the question eventually flips. Instead of asking why Comcast would sell Jurassic, Minions or Shrek when those franchises are doing well, ask why Comcast would refuse a buyer willing to pay a substantial premium for owning them if Comcast can keep the institutions that create the next generation of franchises and the Experiences business that monetizes them physically.

The numbers obviously don’t prove the deal works. There are rights issues, taxes, debt allocation, licensing economics, governance questions and a hundred other things buried underneath a transaction like this.

But they do illustrate why I keep coming back to the idea.

Hollywood has spent decades assuming the studio, the IP, the distribution platform and increasingly the physical experience all become more valuable when they sit under one corporate roof. Disney is the great proof that sometimes they do.

Netflix and Universal might be the more interesting proof that sometimes they don’t.

This is the second in my series about a potential Netflix-NBCUniversal “merger.” Last week, I argued that Netflix has already won the war it originally set out to fight. Streaming won. More importantly, Netflix won streaming. Its next challenge isn’t replacing television but becoming the platform where more of entertainment lives.

That raises an interesting question about everyone who spent the last decade trying to catch it.

Hollywood’s answer to disruption was remarkably consistent: get bigger. AT&T bought Time Warner. Discovery subsequently combined with WarnerMedia. Comcast bought NBCUniversal. Amazon bought MGM. Media companies launched their own streaming services, pulled content behind their own walls and tried to control more of the relationship between intellectual property and consumer.

The logic was understandable because Hollywood had spent decades watching Disney.

Disney demonstrated the extraordinary economics that could be created when movies, television, consumer products, theme parks, hotels and cruises all reinforced the same intellectual property. As the industry came under pressure, the instinct was understandable: own more of the stack and build your own version of the Disney flywheel.

I think Hollywood learned the wrong lesson.

Disney wasn’t evidence that every entertainment company should become vertically integrated. It was evidence of how valuable vertical integration can be when every piece genuinely makes the other pieces better.

Disney Should Be Disney

If anything, Disney is currently proving just how powerful that model can be.

Josh D’Amaro has described his strategy around three priorities: intellectual property, technology and direct fan relationships. The objective is what Disney calls “lifetime fan value.”

Toy Story is a useful example. Across five films, the franchise has generated more than $4 billion at the global box office. Disney says consumers have watched more than two billion hours of Toy Story on Disney+, while the franchise generates more than $1 billion annually in retail sales. It now extends across four immersive lands, 19 attractions and two hotels.

That’s a flywheel.

And increasingly, the physical part is becoming an extraordinary business in its own right. Disney’s Experiences division generated nearly $10 billion in revenue in its latest quarter and more than $3 billion in operating income. Revenue increased 10%. Operating income increased 20%.

Disney isn’t harvesting that business either. It is investing aggressively in new attractions, ships and capacity, while pushing AI, simulation and digital twins deeper into how Imagineering designs and operates experiences.

Disney isn’t trapped by its integration. Disney is advantaged by it. The trap was assuming the advantage came from owning the pieces rather than possessing the capability to make them reinforce one another.

The Organizational Chart Was Never the Moat

AT&T may be the clearest demonstration.

The logic behind acquiring Time Warner wasn’t absurd. AT&T had distribution and customer relationships. Warner had HBO, Warner Bros., CNN and an extraordinary entertainment library.

On a PowerPoint slide, the synergies were everywhere.

In reality, owning all those businesses didn’t magically make them more valuable. AT&T eventually reversed course and WarnerMedia was combined with Discovery.

The lesson isn’t simply that AT&T executed badly (although that is a big part of it). The bigger lesson is that integration isn’t a strategy unless the integration itself creates an advantage.

• Sometimes you have a flywheel.

• Sometimes you simply own a lot of businesses.

Which brings me to NBCUniversal.

What Is Universal Actually Great At?

Universal is an extraordinary collection of assets, but the more important question is what capabilities it possesses that are genuinely difficult for someone else to recreate.

Making theatrical movies is one. Universal Pictures remains one of Hollywood’s strongest studios. Illumination has turned Despicable Me and the Minions into global franchises. DreamWorks brings Shrek, Kung Fu Panda and How to Train Your Dragon. Universal understands theatrical marketing, eventization and franchise development.

Physical entertainment may be an even greater advantage. Epic Universe demonstrates the scale of what Universal can build. Designing, financing, constructing and operating destination-scale entertainment is extraordinarily difficult. Very few organizations can do it at Universal’s level.

And there is something revealing about some of its greatest successes.

Universal doesn’t own Harry Potter. It doesn’t own Mario.

Yet Wizarding World and Super Nintendo World are among the most important physical environments Universal has created.

That isn’t a weakness in Universal’s model. I think it’s the clue to its future. Universal has already proven it doesn’t need to own intellectual property to generate enormous value from it. What it needs are durable rights and a capability few others possess.

A Flywheel Without Ownership

Spider-Man provides another precedent.

Sony controls the movie rights, while Disney owns Marvel and the underlying character. Marvel has helped creatively steward the recent films, Sony distributes them, and Disney amplifies Spider-Man through the broader Marvel ecosystem.

It hasn’t always been easy. But Spider-Man has generated roughly $10 billion at the global box office since 2002.

It demonstrates that ownership, production, distribution and franchise stewardship don’t necessarily have to sit inside the same corporation to create enormous value.

Harry Potter proves it physically. Nintendo proves it again. Sony and Disney prove it theatrically: The flywheel can be connected contractually.

Contracts create friction. So does corporate ownership. The question is which structure creates the most value.

Peacock or Epic Universe?

This is where it becomes a question of capital allocation.

Peacock is a perfectly respectable streaming business. But look at who Universal is competing against.

Netflix has spent two decades building global scale, technology and a direct consumer relationship. YouTube has an audience and creator ecosystem nobody in traditional entertainment can replicate. Amazon can subsidize entertainment through a much larger ecosystem. Disney has the flywheel we just discussed.

Peacock has a cool logo.

What is the plausible scenario in which it develops a structural advantage over Netflix or YouTube?

Now ask the same question about Universal Experiences.

How many companies can build Epic Universe? How many can turn Harry Potter or Mario into destinations people cross continents to visit?

The answer is very different.

So I’d rather see Universal put the next marginal billion dollars behind the capabilities where it can plausibly become the best in the world: parks, destinations, location-based entertainment, experiential R&D, AI, simulation, robotics and digital twins.

Disney is already investing heavily in this direction. Universal should too.

Why spend the next $10 billion trying to narrow Netflix’s advantage when you could spend it widening Universal’s?

Instead of trying to build another Netflix, Universal could become something much harder to replicate: the physical infrastructure layer of global entertainment.

That doesn’t mean abandoning filmmaking. Quite the opposite. The studio and Experiences businesses are complementary. One knows how to turn ideas into global entertainment events. The other knows how to turn stories into physical worlds.

Those are businesses where Universal has a credible right to win.

The Disney Trap

This is why the lesson from Disney is so often misunderstood.

Disney’s flywheel works because Disney spent generations building an organization where those connections create enormous economic value.

Universal should ask different questions:

• Where does ownership actually matter?

• Does it need to own the global consumer interface?

• Does it need to own every piece of intellectual property running through its parks?

• Does an IP owner need to own Universal simply because Universal is the best company to build an attraction around that IP?

Harry Potter says no. Nintendo says no. Spider-Man suggests the same principle can extend much further through the entertainment value chain.

Maybe the choice isn’t between building Disney and breaking everything apart. Maybe there is a third model.

Keep ownership where ownership creates an advantage. Keep capabilities where capabilities create an advantage. Connect the rest contractually.

What happens if someone else values some of Universal’s assets more highly than Universal does, while Universal can continue making money from those same assets anyway?

That’s where the math gets interesting. And that’s the deal I want to explore next week.

This is the first in a five-part series about Netflix’s evolving strategy, NBCUniversal’s carve out, why both moves would make for a perfect deal, how that deal could change the playing field for Paramount-WBD and how, while this deal may end up being great for Universal, Netflix still has a bigger battle to fight with YouTube.

Let’s get into it.

There is a strange thing that happens to companies that fundamentally change an industry.

For years, their strategy is obvious. It is so obvious, in fact, that investors, competitors and customers can all explain it in a single sentence. Amazon wanted to replace bookstores. Uber wanted to replace taxis. Airbnb wanted to replace hotels. Netflix wanted to replace television.

Then, almost without anyone noticing, that strategy stops making sense, not because it failed, but because it succeeded.

That thought came back to me over the past few weeks as Netflix announced what initially looked like a series of unrelated partnerships and product launches. The company struck a landmark agreement with France’s largest broadcaster, TF1, allowing subscribers to watch live television directly through Netflix. Reports emerged that it was negotiating to bring Hot Ones to the platform while allowing the show to continue living on YouTube. It continued expanding into live sports, is preparing its first nightly talk show and has quietly started experimenting with shorter-form publisher content.

Most of the coverage treated these as individual announcements but they’re all part of the same story.

If you’d shown this list to someone ten years ago, they would have assumed Netflix had lost its way. Why would the company that spent two decades trying to replace television suddenly embrace broadcasters? Why would it license programming that already has a successful home on YouTube? Why would the business that convinced an entire generation that appointment viewing was obsolete suddenly become interested in nightly talk shows and live sports?

The answer is that the company is solving a completely different problem.

Yesterday’s War

For most of its history, Netflix’s strategy was built around one objective: convincing consumers to stream. Every original series, every licensing negotiation and every technology investment served that goal. Original programming reduced dependence on Hollywood. Binge releases differentiated Netflix from linear television. A bigger library attracted more subscribers, and more subscribers justified even greater investment in original content. It was an elegant flywheel that reshaped an industry.

By almost any measure, that strategy worked.

Streaming won. More importantly, Netflix won. Every major media company reorganized itself around a world Netflix had already created. Disney built Disney+. Warner Bros. Discovery doubled down on Max. Paramount launched Paramount+. NBCUniversal created Peacock. Companies that once believed streaming was simply another distribution channel eventually accepted that it had become the business itself.

When you’ve spent twenty years trying to convince people to abandon television, it’s easy to keep acting as though that’s still your mission. The problem is that it no longer is.

Consumers don’t need convincing anymore. Streaming isn’t the future, it’s the default. Netflix doesn’t wake up every morning asking how to persuade someone to cancel cable. The strategic challenge has become something far more interesting.

How do you become the place people go whenever they want to be entertained? That’s a much bigger ambition than replacing television.

Once you start looking at Netflix through that lens, the recent announcements begin to fit together almost perfectly.

A Different Battlefield

The TF1 partnership isn’t really about French television. It’s about ensuring French households have one less reason to leave Netflix. The reported Hot Ones deal isn’t about competing with YouTube. It’s about making one of the internet’s biggest shows part of the Netflix experience without asking viewers to choose between platforms.

The proposed structure of the deal is arguably the most revealing part. Netflix reportedly has no issue with Hot Ones continuing to publish on YouTube. What it does want, however, is control over the advertising inside the Netflix version. Brand integrations that work perfectly well on YouTube are reportedly being stripped out before the show appears on Netflix, allowing Netflix to sell that inventory itself. That isn’t the behavior of a company obsessed with exclusive content. It’s the behavior of a platform that increasingly understands where value is created. The audience can exist in multiple places. The advertising relationship cannot.

Live sports create routine. Nightly talk shows encourage daily engagement. Publisher content competes for the moments between prestige dramas and blockbuster films.

The common thread isn’t content, it’s owning the customer relationship.

Netflix appears to be broadening the number of reasons consumers open the app, not simply increasing the number of shows they can watch once they’re there. That’s an important distinction because it fundamentally changes the company’s relationship with the rest of the entertainment industry.

For years, success depended on replacing everyone else. Today, success increasingly depends on bringing everyone else onto the platform.

That leads us to Apple. Not because Netflix is becoming Apple, but because platform companies eventually arrive at remarkably similar strategic questions.

Apple doesn’t need to build every application consumers use. Spotify makes the iPhone more valuable. So does Uber. So does Instagram. Apple benefits every time another great company strengthens the ecosystem, even if Apple doesn’t own it. Its objective isn’t to replace every application. It’s to ensure the iPhone remains the first place consumers turn.

The operating system is the strategic asset. Everything else strengthens it.

I think Netflix has quietly begun asking the same question.

· Which assets make the platform stronger simply by participating in it?

· And which assets are too important to leave in someone else’s hands?

Those are very different questions from the ones Netflix asked a decade ago.

The Ownership Question

This is where another recent story becomes relevant.

Bloomberg recently reported that Netflix executives have become increasingly focused on audience retention beyond a show’s first season. That’s hardly surprising. Creating a hit series and creating a franchise are two entirely different challenges. A successful launch attracts subscribers. An enduring franchise compounds value for decades through games, consumer products, licensing, merchandise, experiences and entirely new formats that don’t even exist when the original show premieres.

The distinction matters because platform companies don’t actually need to own everything. They become valuable by deciding what they don’t need to own.

Netflix doesn’t have to own French television if TF1 strengthens the platform. It doesn’t have to own YouTube if creators are willing to distribute through Netflix. It doesn’t have to own every sports league if live events make Netflix a more habitual destination.

But no platform company outsources the assets that define it.

· Apple owns iOS.

· Amazon owns its marketplace.

· Google owns Search.

I don’t think the company is asking how much content it should own. I think it’s asking something much more difficult.

What Comes Next

For years, Hollywood’s strategic debate revolved around scale. Bigger libraries. Bigger studios. Bigger streaming services. Bigger conglomerates. The assumption was that owning more inevitably created more value.

I think the next decade will reward the opposite. The winners may not be the companies that own the most. They may be the companies that become ruthlessly disciplined about what they own, what they partner for and where they create unique advantage.

If that’s true, Netflix’s recent announcements are the first signs of a company that believes its next phase of growth won’t come from replacing entertainment. It will come from becoming the platform around which entertainment organizes itself.

That naturally leads to another question. If Netflix has quietly figured out what it no longer needs to own, what are the few assets it should be willing to own forever?

That answer doesn’t lie inside Netflix, it lies somewhere else in Hollywood.

More to come next week.

The problem is that memorable moments, on their own, rarely create memorable experiences.

Think back to the best meal you’ve ever had. Chances are you don’t remember every course. You probably can’t recall every drink or every conversation. What you remember is how the evening unfolded. The anticipation when you arrived. The moment everyone relaxed. When conversation became effortless. When time seemed to disappear. Somehow, the entire night felt bigger than the sum of its parts.

We created Tales House, an immersive journey through the science of hospitality. Across seven rooms, guests experienced how expectation shapes flavor, how sound builds anticipation, how scent unlocks memory, how stories influence perception, and ultimately why the people we share a drink with matter most. It was an experiment as much as an experience.

The response exceeded anything we expected. Tales House quickly became one of the most talked-about experiences of the festival, welcoming hundreds of guests over the course of the week. But what interested me most wasn’t the reception. It was what we learned by watching hundreds of people move through exactly the same emotional journey.

We had started by trying to design seven memorable rooms. We finished by realizing we were actually designing the space between them. That sequence became the foundation of Tales House. It also fundamentally changed how I think about designing hospitality experiences.

Step One: Open the Mind

Most hospitality experiences try to impress people immediately. We wanted to make them curious instead.

Our opening room was deliberately simple. Guests were served three cocktails and asked to decide which one they preferred. They compared aromas, debated flavors, discussed balance and confidently explained why each drink tasted different.

There was only one problem, all three cocktails were exactly the same (except for the addition of tasteless food coloring, a scent applied to the glass not the drink and manipulation via descriptors). Over the course of the week, several hundred guests experienced the room. Only two correctly identified that every sample contained the identical cocktail.

The result surprised almost everyone, but it shouldn’t have.

In 2001, researchers Frédéric Brochet and Gil Morrot famously dyed a white Bordeaux red using odorless food coloring. Experienced wine tasters immediately began describing it using classic red wine descriptors like blackcurrant and clove. Gordon Shepherd’s work in neurogastronomy later demonstrated that much of what we experience as flavor is actually constructed through smell rather than taste alone, while Hilke Plassmann showed that people consistently reported enjoying the exact same wine more when they believed it was expensive. Different studies reached the same conclusion: flavor isn’t simply detected by the tongue. It’s constructed by the brain.

That wasn’t why this room came first.

It came first because curiosity is a remarkably powerful emotional state. When people realize their assumptions might be wrong, they stop trying to predict what’s coming next and start paying attention. They become more open, more engaged and more willing to participate.

The goal wasn’t to convince guests that their senses deceive them. It was to make them wonder what else they might discover.

Step Two: Turn Curiosity into Participation

Curiosity gets people’s attention, participation gets their investment.

Our second room explored one of the most overlooked aspects of hospitality: the experience begins long before the first sip. Inside a Japanese-inspired listening bar, guests watched the famous Japanese Hard Shake before attempting to recreate it themselves, listening carefully to the rhythm of the shaker rather than focusing on the cocktail it produced.

Charles Spence has shown that sound systematically influences how we perceive flavor, while neuroscientist Wolfram Schultz demonstrated that much of the brain’s dopamine response occurs in anticipation of a reward rather than during the reward itself. The ritual, the choreography and the expectation become part of the experience long before the drink reaches our lips.

But there was another reason this room existed: We needed strangers to stop feeling like strangers.

The challenge wasn’t really about technique. It was about creating a shared experience where people laughed together, encouraged one another and became participants instead of observers. That social foundation mattered because the emotional heart of the experience was still ahead. The following art room (where guests “painted flavor”) doubled down on this.

Step Three: Earn the Right to Be Personal

One of the biggest mistakes in experience design is asking people to be emotionally vulnerable before they’ve been given a reason to trust the environment.

We intentionally waited until a later room before introducing memory.

By then, guests had already questioned their own assumptions, completed challenges together, painted together and spent nearly an hour interacting with one another. The atmosphere had changed. Conversations had become natural. Defenses had disappeared.

Only then did we ask them to smell a collection of botanicals and share whatever memories those aromas unlocked. Rachel Herz’s research has shown that scent-triggered memories are fundamentally different from memories triggered by sight or language. Because smell has a unique neurological pathway into the brain’s emotional and memory centers, odor-evoked memories tend to be more vivid, emotional and immediate.

But what matters even more than the science itself was the sequencing.

Had we asked guests to share childhood memories within the first ten minutes, the room would almost certainly have felt awkward. By placing it after an hour of shared experiences, many guests naturally found themselves telling deeply personal stories to people they hadn’t known an hour earlier. We heard of grandparents, first dates, lost friends. The room became everything we envisioned it to be, and it would not have been possible had it sat at a different spot in the sequence.

The science explained why scent unlocks memories. The design determined whether people were ready to share them.

Step Four: Give Experiences Meaning

By the sixth room, cocktails had become vehicles for something much larger.

Guests gathered around a communal table to play Bourré, a traditional Louisiana card game, while exploring the stories behind some of the region’s most iconic drinks. Instead of treating cocktails as recipes, we explored them as products of migration, trade and cultural exchange. Every ingredient carried a history. Every recipe represented generations of people adapting, sharing and building on what came before.

Research by Charles Spence has shown that narrative systematically changes how people perceive flavor and enjoyment, while food historian Jessica B. Harris has spent decades documenting how migration and cultural exchange shaped Southern foodways and cocktail culture. Stories don’t simply explain a drink. They become part of the experience of drinking it.

Step Five: Know When to Stop Designing

The final room contained almost no programming not because we’d run out of ideas but because it was because another lesson had emerged during the design process.

Once you’ve created curiosity, encouraged participation, built trust and given people something meaningful to talk about, your job changes.

It moves from creating moments to creating space.

The final room was simply a communal bar where guests could continue conversations that had already begun. Looking back, that may have been the most important design decision we made. We didn’t need another scientific experiment. We didn’t need another reveal. The experience had already done its job.

Research from Robert Waldinger’s long-running Harvard Study of Adult Development concluded that the quality of our relationships is the single greatest predictor of long-term wellbeing. Robin Dunbar’s work suggests that shared rituals such as eating, drinking and storytelling strengthen social bonds, while Ray Oldenburg argued that vibrant communities depend on “third places” where people naturally gather outside home and work.

For all the neuroscience, psychology and sensory science we explored while building Tales House, that final lesson felt surprisingly simple. Hospitality has never really been about food, or cocktails, or beautiful spaces.

Those things matter because they give people a reason to gather. The real product has always been human connection.

If you want to dive deeper into cocktail driven IRL experience read our report “From Liquid to Lifestyle” here https://solomongroup.com/tales-of-the-cocktail-white-paper

Next up: Why Germany will win the 2030 FIFA World Cup.

Cheers,

Daniel

First of all, why drop on a Wednesday? Because I am behind, and I need to write about the psychology behind immersive high end hospitality experiences, why Germany will win the FIFA World Cup 2030 and why Netflix may go for freshly spun out NBCUniversal.

So, we are dropping today, this Friday, next Monday and the Monday after that before returning to our two-week cadence.

Now let’s get into it. In my last newsletter, I wrote about how consumers are increasingly traveling for culture rather than attractions. Food simply happens to be one of the first industries to fully embrace that shift. In today’s newsletter I want to share another thought which has very little to do with cocktails, celebrity bartenders or Michelin-starred dinners. Instead, it had everything to do with how the event itself had been designed.

At Tales, New Orleans itself had quietly become the venue. Restaurants, hotels, historic bars, courtyards and rooftops aren’t supporting the event, they are the event.

At first that might sound obvious. Tales has always been intertwined with New Orleans. But I increasingly think this operating model represents one of the most interesting developments in live experiences. More importantly, I suspect it offers lessons that extend well beyond F&B festivals.

Stop Building Infrastructure You Already Have

The live events industry has become remarkably good at building temporary cities.

We construct kitchens that will only exist for a weekend. We erect bars that disappear after three days. We install temporary hospitality lounges, VIP areas, back-of-house facilities, production offices and catering compounds before tearing everything down almost immediately afterwards. It is simply how festivals have been designed for decades.

There are obvious reasons for this. Most events take place on greenfield sites, fairgrounds or inside convention centers where very little permanent infrastructure exists. Producers therefore have little choice but to build their own.

Cities, however, already possess much of that infrastructure.

New Orleans has hundreds of restaurants. It has world-class cocktail bars, historic hotels, beautiful courtyards and neighborhoods that people actively want to explore. Rather than recreating those assets inside a fenced festival footprint, Tales simply connects them through programming.

That may sound like a subtle difference, but operationally it changes almost everything.

Instead of spending millions recreating a city, the event leverages one that has been evolving for more than three centuries.

Seasonality Isn’t Always a Weakness

One aspect of Tales struck me as particularly interesting.

The event takes place in July, traditionally one of New Orleans’ quieter tourism periods. Most people instinctively see that as a disadvantage. Lower demand, fewer visitors and challenging weather don’t immediately sound like the ingredients for a world-class event.

Yet those same conditions create something incredibly valuable: capacity.

Restaurants have availability. Hotels have rooms. Venues have flexibility. Some of the city’s best kitchens suddenly have the opportunity to host collaborations that would be almost impossible during peak tourism season.

That capacity has allowed Tales to organically evolve into a citywide platform featuring more than 400 events rather than a convention with a handful of evening functions.

I also think it changes the conversation with talent.

One of the hardest parts of producing any culinary event is convincing exceptional chefs to leave their own restaurants for several days. The environment you’re asking them to work in matters enormously. Cooking inside a temporary field kitchen behind a convention center is fundamentally different from collaborating inside Commander’s Palace, Emeril’s, Restaurant R’evolution or one of New Orleans’ other exceptional kitchens.

The venue stops being a logistical necessity and becomes part of the creative proposition itself.

As that proposition improves, attracting world-class talent becomes easier. Better talent creates stronger programming. Stronger programming gives people another reason to travel.

What initially looked like an operational limitation quietly becomes a competitive advantage.

The Venue Shapes the Experience

We often talk about talent as though it alone defines the guest experience.

I don’t think that’s quite right. The stage matters.

A pianist doesn’t perform the same way in Carnegie Hall as they do in a hotel ballroom. Likewise, chefs care deeply about kitchens, equipment, ingredients and workflow because those variables directly influence what ends up on the plate. Bartenders care about bars for exactly the same reason. Their environment isn’t simply where the performance happens; it’s part of the performance itself. And the performance matters to the guest experience as we will explore in my next drop.

That is one of the subtle advantages of using a city instead of replacing it.

The event inherits decades of investment that no producer could realistically recreate. Technology companies often talk about standing on the shoulders of giants. In many ways, Tales does the same thing.

Discovery Is Designed Into the City

One thing I noticed throughout last week was how rarely people followed their original schedule.

A seminar would run long. Someone would recommend a nearby bar. Dinner would turn into another event a few blocks away. Conversations continued while walking between venues and often resulted in entirely new plans for the evening.

I don’t think that’s accidental. Cities naturally create serendipity in ways convention centers struggle to replicate. The walk between experiences becomes an experience itself. Visitors discover restaurants they hadn’t booked, bars they hadn’t heard of and neighborhoods they otherwise might never have explored.

Those unplanned moments are surprisingly valuable because they’re the stories people tell after they get home. Ironically, they rarely appear on the official program.

What Producers Should Learn

Last week’s newsletter argued that consumers increasingly travel for culture rather than attractions. If that’s true, producers face an interesting challenge.

For decades we’ve optimized around footprint, attendance, exhibition space and production efficiency. Those things still matter, but they’re becoming less important than the quality of the ecosystem surrounding the event. Consumers increasingly remember the conversations, collaborations, neighborhoods and moments of discovery that happen between programmed sessions just as much as the sessions themselves.

That requires a different design philosophy.

Rather than asking, “How do we build the perfect venue?”, perhaps we should start asking, “What already exists that we’d never be able to build ourselves?”

The answer may be a city.

Art Basel wouldn’t be Art Basel without Miami. SXSW is inseparable from Austin. Tales belongs to New Orleans.

None of those cities simply host their events. They amplify them.

As producers, I suspect we’ve spent years trying to build better festivals when perhaps we should have been thinking more carefully about how to build better relationships with the places capable of making those festivals extraordinary.

The future of live experiences may not belong to the events with the biggest footprint. It may belong to those that understand how to unlock the extraordinary infrastructure cities have been quietly building for decades.

Cheers to another successful Tales in the books.

BR,

Daniel

Last year I spent several days at Tales of the Cocktail in New Orleans. Officially, it’s the world’s leading cocktail conference. But somewhere between walking the city, bouncing between events and talking to chefs, bartenders, brand owners and hospitality leaders, I found myself thinking about something entirely different.

While I love a good cocktail (and Tales has the best) this really is an experience that shows where tourism is headed.

For decades, food complemented travel. You went to Paris for the Eiffel Tower, Kyoto for its temples and Nashville for its music. Dinner was part of the experience, but rarely the reason you booked the flight. That relationship has quietly flipped.

American Express and Resy recently found that 47% of Millennials and Gen Z travelers have planned an entire trip around a restaurant, while McKinsey has documented a broader shift in discretionary spending toward memorable, participatory experiences over material travel purchases. Food happens to sit right at the intersection of those forces. It combines craftsmanship, culture, entertainment and community in a way few other categories can.

People no longer want to simply visit a destination. They want to understand it, meet the people behind it and, if only for a weekend, feel like they’re part of the culture. That has enormous implications, not just for restaurants, but for tourism boards, governments, producers and anyone designing experiences people are willing to travel for.

Access Is the New Luxury

One of the defining trends across luxury over the past decade has been the gradual shift from ownership to access.

Consumers still value exceptional products, but increasingly they are willing to pay an even greater premium for experiences that feel genuinely difficult to replicate. Scarcity has evolved. It is no longer defined solely by limited production runs or exclusive memberships. Increasingly, it is defined by moments.

The culinary world illustrates this better than perhaps any other industry.

People are no longer flying across continents simply to eat dinner at a famous restaurant. They travel to attend collaborations between chefs who rarely cook together. They book masterclasses taught by the world’s leading bartenders, visit distilleries alongside the people making the spirits and spend evenings hearing directly from the individuals shaping global food culture.

The meal still matters. But increasingly it serves as the vehicle rather than the destination.

This trend extends well beyond food and beverage. Formula One now generates enormous value through paddock access. Luxury brands increasingly monetize private presentations, atelier visits and invitation-only experiences. Fanatics is expanding beyond merchandise into experiences that bring fans closer to athletes and leagues.

Consumers increasingly don’t want better products. They want access to the people, places and stories behind them. That shift fundamentally changes how destinations should think about tourism.

Culinary Tourism Becomes Economic Development

Within the broader hospitality industry, food and beverage quietly represents one of the largest contributors to economic activity. Restaurants, bars and other eating and drinking establishments generate roughly $1.5 trillion in annual economic output in the United States, accounting for more than 5% of total U.S. GDP. Within hospitality itself, food and beverage routinely contributes a larger share of economic activity than lodging. Full-service hotels derive approximately 30% to 50% of their revenues from food and beverage operations, demonstrating just how closely culinary experiences have become intertwined with tourism.

Every neighborhood restaurant, café, bakery, cocktail bar and market becomes part of the visitor experience. Independent restaurants also generate significantly higher local multiplier effects than national chains, recirculating substantially more revenue through local suppliers, farms, distributors and service providers.

That creates a powerful economic flywheel. Visitors travel because of culture. Culture drives restaurants. Restaurants strengthen neighborhoods. Strong neighborhoods improve the visitor experience. Better experiences attract more visitors.

Few cities demonstrate this better than New Orleans.

The city’s culinary identity has become one of its strongest tourism assets, sitting alongside music, architecture and festivals as a primary reason people choose to visit. That reputation has taken generations to build, but today it delivers measurable economic value.

Increasingly, governments are recognizing this. Michelin Guides are subsidized by tourism authorities. Countries invest heavily in promoting regional cuisines. Culinary identity is no longer simply part of destination marketing. It has become destination infrastructure.

Authenticity Is Becoming the Competitive Advantage

If experiential travel explains why people are willing to travel, authenticity increasingly determines where they choose to go.

Consumers have become remarkably good at distinguishing between experiences that feel genuinely rooted in a place and those that have simply been designed to look that way. According to Stackla’s global consumer research, 90% of consumers say authenticity is a deciding factor in the brands they support, rising even further among Millennials and Gen Z. Perhaps more tellingly, the study uncovered a striking “authenticity gap”: while 92% of marketers believed the content they created felt authentic, only 51% of consumers agreed.

Just as consumers can immediately identify a polished but artificial advertising campaign, they are becoming equally adept at spotting manufactured tourism experiences. Cookie-cutter attractions, imported concepts and generic festival formats increasingly struggle to compete against experiences that feel deeply connected to local people, traditions and culture.

The music festival industry offers an incredible proof point. Rather than simply exporting Western festivals into Asia, many of the world’s largest brands are redesigning themselves around local identity. Tomorrowland’s expansion into Thailand has been positioned as an Asian festival for Asian audiences rather than a Belgian import. Day Zero’s Bali edition incorporated Balinese prayer ceremonies, local mythology and regenerative design into the experience instead of recreating Tulum. Wonderfruit’s expansion into Kyoto is built around the Japanese concept of myo, while Fuji Rock has become one of Asia’s defining festivals by blending international artists with distinctly Japanese environmental values and community participation.

The lesson is bigger than music: Consumers increasingly don’t reward experiences because they are globally famous. They reward them because they feel impossible to recreate somewhere else. Authenticity has quietly evolved from a marketing message into the product itself.

Nobody travels to New Orleans hoping for a generic cocktail. They travel because New Orleans could only ever be New Orleans.

Consumers Increasingly Travel for Culture…

… and F&B may simply be the first industry to fully embrace this transformation.

Consumers increasingly organize travel around cultural participation rather than sightseeing. They are willing to board airplanes for chef collaborations, cocktail weeks, music festivals, sporting events and cultural gatherings that offer something genuinely unique. That creates enormous pressure on every experience industry.

Traditional festivals built around exhibition halls, sponsor booths and passive programming increasingly compete against events that offer collaboration, education, participation and authentic connection. Around the world, governments are responding by investing heavily in cultural platforms rather than individual attractions, recognizing that festivals, food, music and local identity can become long-term engines for tourism and economic development.

The much bigger question is what this means for the rest of the experience economy. Because if culture becomes the primary driver of travel demand, the festival, conference and live event industries may be about to undergo one of their biggest redesigns in decades.

That’s where I’ll go next week…

Note: This is the first of a two-part series inspired by Tales of the Cocktail in New Orleans. This year also marks the launch of Tales Passport, opening the event to consumers for the first time through a limited collection of experiences including a one-night collaboration between EJ Lagasse, Pujol, Californios and Handshake Speakeasy, an immersive exploration of flavor at Tales House, The Cocktail Studio and soooo much more.

If you’d like priority access before tickets are released publicly, you can join the waitlist here: https://talesofthecocktail.org/tales-passport/

A few days ago, Audemars Piguet and Swatch officially launched the “Royal Pop.” By almost every traditional commercial metric, it was an explosive, massive success.

People camped outside boutiques for days. Lines wrapped around entire city blocks in London, New York, and Paris. Within hours, the pieces hit resale sites at staggering premiums. Social media fractured into a predictable storm of wrist shots, comment-section warfare, and raw flex culture. For a brief weekend, select Swatch stores felt less like traditional watch retailers and much more like a mid-2010s Supreme drop.

Which is exactly what the collaboration was engineered to do.

The Luxury Onboarding Blueprint

The MoonSwatch had already proven that the structural formula worked. The true genius of the original Omega partnership was never really about the physical watch itself, it was about the brilliant psychological positioning underneath it. Swatch figured out a repeatable mechanical blueprint to turn one of the most iconic, unachievable luxury silhouettes in watchmaking history into a mass-market entry ramp.

Symbolic Access

Luxury fashion houses have executed variations of this playbook for generations: fragrances, branded sunglasses, and small leather keychains. You aren’t buying the actual top of the pyramid, you are buying affordable proximity to the overarching corporate mythology. But Swatch layered something much newer onto that traditional luxury retail formula: pure hype mechanics.

• Scarcity dynamics

• Overnight physical queues

• Drop culture drops

• Resale market economics

• TikTok flex loops

It was luxury accessibility fused seamlessly with sneaker psychology.

The Omega Precedent

Commercially, that pairing worked brilliantly with Omega. The MoonSwatch became one of the biggest cultural moments the modern watch industry had seen in decades. Younger consumers flooded into a stagnant category, Swatch boutiques achieved instant cultural relevance, and Omega gained astronomical global visibility without meaningfully damaging the prestige or pricing power of the actual mechanical Speedmaster.

I don’t think the MoonSwatch hurt Omega. If anything, it meaningfully expanded the brand’s core mythology. Serious collectors inherently understood the vast, unbridgeable gulf between a plastic quartz Swatch collaboration and a true, mechanically hand-assembled Speedmaster. The partnership functioned less like brand dilution and more like aspirational expansion. The kid buying a MoonSwatch today is mentally programming themselves to buy a real Omega a decade from now. That is the corporate dream scenario.

The Fake Leak

So, when the rumors started swirling, an AP collaboration felt like the completely logical next step for the group. Except this time, something strange happened right before the curtain pulled back. The internet invented a completely different watch.

Before Audemars Piguet and Swatch officially revealed the true nature of the collaboration, social media platforms were flooded with AI-generated renders of colorful, plastic Royal Oak wristwatches.

Not pocket watches. Wristwatches.

The unsettling part of this phenomenon wasn’t the existence of the renders, it was how instantly and completely the community accepted them as absolute reality. Massive watch curation pages reposted them. Dedicated forums fiercely debated the imaginary colorways. Entire digital communities emotionally attached themselves to a specific product before the physical object even existed in the real world.

Then the actual reveal dropped: Pocket watches! A set of eight colorful, modular pieces meant to be worn on lanyards, used as bag charms, or propped up on desk stands.

And suddenly, a fascinating psychological shift occurred. The internet started treating the real, official launch like it was a disappointing, compromised version of reality. Because emotionally, culturally, and visually, thousands of consumers had already mentally purchased the AI-generated fake version first.

The New Focus Group

That represents a much larger structural shift than most brands realize.

Historically, legacy brands controlled the architecture of anticipation with extreme care. Teaser campaigns were designed to slowly, intentionally shape consumer desire over months. But generative AI changes that power dynamic entirely. Now, audiences can collectively generate, distribute, and validate their own preferred version of reality long before a company ever launches a physical product.

I suspect brands are going to start quietly, intentionally weaponizing this exact phenomenon themselves. Because AI has accidentally created an incredibly powerful, frictionless market-testing machine.

A brand could easily leak ten distinct AI-generated product concepts tomorrow from an unaffiliated, anonymous burner account and instantly learn everything they need to know:

• Which silhouette spreads fastest through the algorithm

• Which specific colorway creates immediate emotional attachment

• Which version drives the highest volume of resale speculation

• Which concept people emotionally commit to before a single factory mold is cast

The internet effectively becomes a live, organic, zero-cost emotional focus group. AI potentially gives brands a structural tool to prototype fantasy itself before risking capital to manufacture reality.

IRL Derailing AP’s Equity

When the physical world finally arrived for the Royal Pop, the actual launch weekend quickly descended into localized operational chaos across multiple global cities. Because of the strictly limited, in-store-only allocation, people camped outside for days. Scuffles and physical fights broke out in lines. Police had to intervene with crowd control measures in several locations, and multiple boutiques were forced to abruptly shut their doors because the massive crowds became entirely unmanageable.

Many critics argue over whether a plastic, pop-art pocket watch dilutes a brand that sits at the absolute pinnacle of Haute Horlogerie. But the actual product design isn’t what threatens Audemars Piguet’s equity. Others debate whether community AI renders will erode the brand. I don’t think that’s a risk either. The real danger is the operational breakdown when it comes to the launch.

Audemars Piguet operates in a highly fragile psychological layer of luxury culture. AP relies heavily on control, artificial distance, and an immaculate, white-glove ecosystem. When the physical manifestation of your brand becomes synonymous with chaotic street brawls, police intervention, and unmanaged crowds on the nightly news, the illusion of elite exclusivity fractures. The operational failure degrades the brand tier far faster than a playful plactic case ever could.

Overconfidence and the Need for Experiential Experts

This is where the real threat of AI emerges for legacy brands. It isn’t deepfakes or misinformation. It is operational overconfidence.

Because AI tools can now flawlessly simulate hype, beauty, consumer demand, emotional reaction, and cultural consensus. But absolutely none of that software ensures that the physical experience actually functions when real humans show up in real space.

That risk becomes catastrophic in real-life activations because most traditional brands fundamentally do not operate in the physical layer professionally. A luxury watchmaker can easily figure out how to engineer a beautiful watch movement. That does not mean their internal team has any native understanding of how to manage guest flow, crowd psychology, operational pacing, arrival experiences, or localized event security.

Those are entirely distinct, specialized human disciplines.

We are entering a world where brands are becoming dangerously overconfident because AI allows them to emotionally validate concepts before reality has tested them operationally. The digital fantasy arrives first now, fully optimized. The physical reality shows up later, desperately hoping it can keep up with the feed.

Just ask Mattel how they are feeling about the Barbie Dreamfest.

For anyone designing physical experiences, managing events, or producing live brand activations, bringing in experiential experts to manage that specific gap between digital expectation and physical execution is no longer optional, it is going to be one of the defining business challenges of the next decade.

Cheers,

Daniel

Image: Will Rolex X Swatch be next (hint: no it wont)

Last week, I wrote about how AI-native micro-dramas, conversational sycophancy, and personalized attachment loops are quietly rebuilding the digital feed to exploit our natural vulnerabilities. I made the comparison to fentanyl: a technology that is incredibly valuable when applied to medicine or accelerated learning, but socially catastrophic when optimized purely for cheap, addictive emotional consumption.

Let’s pivot from the threat to the antidote.

If the digital world is scaling synthetic intimacy, then the physical world is no longer just a venue for entertainment or hospitality. It has become an essential counterweight.

But to pitch IRL experiences effectively to clients, or to design them with intention, we have to look past vague wellness buzzwords (looking at you my dear “immersive-as-wellness-thought-leaders”). We need to ground our work in empirical neuroeconomics, evolutionary biology, and clinical data.

Human physiology is hardwired for physical proximity. When we substitute authentic, in-person shared experiences with digital alternatives, we create a biological deficit that carries measurable costs – both from a health and income perspective.

Below are a few examples of why the future of wellbeing belongs to IRL and why analog is the antidote to AI based overstimulation.

The Perfect Longevity Supplement

At the most fundamental level, physical gatherings are not an indulgence, they are a biomedical necessity. Our body interprets physical isolation as an acute threat. Physical gathering acts as a necessary biological buffer that protects long-term health.

• The “15 Cigarettes” Parity: Clinical data proves that a low baseline of physical, face-to-face interaction carries a mortality risk equivalent to smoking 15 cigarettes a day, rendering severe isolation significantly more destructive than physical inactivity or obesity.

• The Biological Reset: True physical presence downregulates the biological threat-response system. While prolonged loneliness alters gene expression to turn on chronic inflammatory pathways, recurring IRL touchpoints actively reverse this genetic stress response.

• Overcoming the Withdrawal Cycle: Chronic isolation triggers a psychological paradox: it makes individuals hyper-vigilant to social threats, causing them to withdraw defensively. Highly curated, immersive, and structured IRL programming lowers the barrier to entry, helping isolated individuals break out of this cycle safely.

Loneliness is a major cause of poor health outcomes. Ask yourself: How much are you spending on those longevity supplements and should some of that be better spent on IRL?

Aligning via Shared Rituals

IRL experiences do not just facilitate accidental contact, many promote shared rituals. This structural repetition transforms a temporary audience into an aligned community, building high-value emotional equity that people and brands desperately need.

• A Shared Reality: When individuals gather for a synchronized purpose, whether a festival, a sporting event, or an immersive brand activation, they enter a state of shared emotional intensity. This collective energy blurs the boundaries of the self, transforming a crowd into a tribe.

• The Trust & Commitment Loop: Participating in a shared group ritual signals mutual vulnerability and alignment. This mechanism lowers interpersonal friction, serving as a foundation for deep institutional trust and emotional commitment.

• Anchoring Memory: For brand and cultural experiences, static marketing messages lack emotional durability. When a narrative is integrated into a physical ritual, it shifts the consumer from a passive observer to an active participant, permanently anchoring the experience within their long-term memory network.

I find the last point particularly powerful. By creating a shared experience, with a ritual element (sports are amazing in this regard) a brand not only promotes wellbeing but also solidifies its position in the consumers’ minds.

Breaking Bread Together

Digital culture has disrupted our most basic evolutionary bonding mechanism: eating together. We have traded the physical dining table for lonely scrolling, and our collective psychology is paying the price. True hospitality centered around food and beverage acts as one of the cleanest proof points for real-world connection.

• Like Making Money: Chapter 3 of the World Happiness Report mapped the first global dataset on “social eating.” Researchers from UCL and Oxford discovered that for individuals who routinely dine alone, transitioning to a lifestyle where they regularly share meals yields a self-reported life evaluation boost equivalent to a doubling of their household income.

• The Chemistry of Hospitality: Breaking bread in a physical space lowers social friction immediately. The sensory combination of taste, shared environment, and unhurried face-to-face conversation creates an optimal baseline for interpersonal trust and psychological safety that an algorithmic interface cannot simulate.

Perhaps the future of preventative care looks less like another supplement and more like a great restaurant, a neighborhood bar, or a shared table. A cocktail as treatment, sign me up.

The Power of Awe

The digital feed compresses the human experience into a small, flat, two-dimensional screen. Immersive, physical environments do the opposite: they offer physical scale and wonder, triggering a distinct, healthy psychological mechanism known as Embodied Awe.

• The “Small Self” Phenomenon: Encountering physical environments of vast scale, deep beauty, or massive collective energy shifts our cognitive perspective. Psychological studies show that awe induces a state of the “small self.” In this state, personal anxieties and negative rumination are minimized as individuals realize they are part of a larger, tangible ecosystem.

• Becoming a Better Person: In experimental settings, individuals who experienced awe demonstrated significantly higher levels of generosity, ethical decision-making, and a spontaneous willingness to help others compared to control groups.

Fun fact: Jonas Salk credited a visit to the Basilica of Saint Francis of Assisi in Italy with helping unlock the breakthrough thinking that eventually led to the polio vaccine. Surrounded by massive architecture, silence, beauty, and psychological scale, Salk later said the experience allowed him to think “far beyond” his normal patterns.

Preventing Digital Doom

When human interaction is completely digitized, the mind loses its grounding, physical touchpoints. This isolation causes a breakdown in objective reality testing and creates destructive social comparison loops.

• The Risk of Algorithmic Echo Chambers: Deep, prolonged isolation paired with heavy reliance on interactive digital networks or generative systems can impact standard reality testing. The social environment naturally provides corrective feedback when an individual’s thinking drifts into unhealthy territory. Removing real-life social circles eliminates this guardrail.

• The Death of the Local Comparison Scale: Historically, human beings regulated their self-worth by evaluating their progress against a local, tangible reference group (their literal village or workspace). Today, digital platforms force individuals to compare their daily lives against a globally aggregated, hyper-curated, and often falsified top 0.001% of lifestyles.

• The Grass is Greener Trap: Because digital feeds present an unrelenting stream of manufactured perfection, they trigger chronic states of inferiority, intense envy, and permanent dissatisfaction. Physical gathering grounds individuals back in a tangible, healthy, and authentic peer-to-peer reality.

Ask yourself: before social media, would you have ever compared your actual life to a 26-year-old crypto millionaire standing shirtless next to a rented Lamborghini in Dubai? Probably not. The internet didn’t just globalize communication. It globalized envy. Physical reality quietly fixes this.

Getting Lucky Today

What the public routinely defines as “good luck” is actually a predictable byproduct of specific behavioral traits and environmental exposure. IRL environments function as an accelerator for personal, creative, and professional serendipity.

• The Architecture of Luck: A 10-year longitudinal study by psychologist Dr. Richard Wiseman proved that self-described “lucky” people generate their own fortune by building a large, diverse network of connections. They encounter more chance opportunities simply because their physical exposure to a variety of people and ideas is exceptionally high.

• The “Relaxed Awareness” Multiplier: Eye-tracking experiments confirm that anxious, closed-off, or digitally distracted individuals suffer from a form of “inattentional blindness”, they literally fail to notice opportunities right in front of them. Lucky individuals possess an open, relaxed awareness, making them 4x more likely to spot and exploit unexpected opportunities.

• Expanding the “Luck Surface Area”: Unexpected value occurs when a person encounters a random trigger and “connects the dots.” Immersive physical environments maximize these high-probability collisions that digital algorithms, which are optimized to keep you in a predictable, familiar loop, purposely filter out.

“Luck” and “getting lucky” may actually share the same operating system: leaving the house, talking to strangers, and increasing your collision rate with other humans.

Just What the Doctor Ordered

As experience designers, producers, and strategists, the below should become part of our argument.

We are not just selling tickets, space, or hospitality. We are building the critical infrastructure required to keep human beings anchored, healthy, and connected. In a world increasingly dominated by synthetic attachment and emotional occupation, real-world experiences are valuable far beyond the financial return they generate.

Let’s do this,

Daniel

Why the next crisis may be emotional infrastructure

Hi friends,

Last week I wrote about the rise of micro-dramas. The bigger point wasn’t really about vertical video or soap-opera-style storytelling. It was about the fact that storytelling itself is being rebuilt for the feed: shorter, faster, more emotionally optimized.

Let me be blunt: The format has real problems. And they’re escalating quickly.

You’re already seeing it in your own feed: fake AI-generated ads, actors having their likenesses used without consent, and fabricated scenes that never appeared in the actual show. We are seeing increasingly sexualized “engagement bait” designed purely to drive clicks. The trailer is becoming disconnected from the story itself.

Or perhaps more accurately: the emotional trigger is becoming more important than the narrative.

That alone is concerning. But after reading about a company called StoReel this week, I realized there’s a much bigger issue emerging underneath all of this. And I think we are underestimating how psychologically powerful these systems may become.

StoReel and the Rise of Emotional Occupation

StoReel is building AI-native micro-dramas. On the surface, it looks like more “AI slop.” But look closer. They aren’t just generating video. They are building interactive, serialized storytelling.

· AI Actors: Infinite characters with consistent “aesthetic IP.”

· Personalized Narratives: The story changes based on how you react.

· The Talk-Back Layer: You don’t just watch the protagonist. You chat with them. You advise them. You emotionally invest in their outcomes.

StoReel isn’t trying to build “better television.” They are responding to a very modern, very desperate need for companionship, stimulation, and low-friction escape. They aren’t selling entertainment; they are selling Emotional Occupation.

The Cliffhanger Economy

Micro-dramas are uniquely powerful because they weaponize one of the oldest tricks in storytelling: the cliffhanger. Psychologists often connect this to something called the Zeigarnik Effect: the human tendency to remember incomplete tasks and unresolved narratives more intensely than completed ones.

Your brain wants closure. Which means every betrayal, every reveal, every romantic twist, and every unfinished conversation creates cognitive tension. Micro-dramas exploit this relentlessly. Every 45–90 seconds, a new unresolved emotional loop is opened. The brain continuously seeks completion, but completion never really arrives. Instead, another loop opens immediately.

This is not accidental storytelling. It is structurally optimized retention.

From Content Loops to Attachment Loops: The Predatory Pivot

When you layer AI onto this, you move from Nir Eyal’s classic Hooked framework into something far more predatory.

In the old model, the “Variable Reward” was a new piece of content. You scrolled, you saw a funny video or a shocking headline, and your brain received a hit of dopamine. But in the AI model, the reward is emotional reciprocity. The system isn’t just showing you a video. It’s adapting the narrative to respond to your specific loneliness, boredom, or anxiety in real-time. Because the system can now personalize emotional beats and adapt narratives based on your specific interactions, you are no longer consuming media. You are entering an emotional feedback loop.

The system isn’t just looking for your attention, it is optimizing for your attachment. It learns what makes you feel seen, what makes you feel validated, and what keeps you coming back for that simulated connection.

The Feed Starts Talking Back: Sycophancy as a Feature

This becomes an issue when these systems are engineered to prioritize human approval over reality.

A recent study published in Science from researchers at Stanford found that AI models exhibit sycophantic behavior in up to 58% of cases. They are programmed to maximize engagement by affirming the user’s every thought. You know you have a problem when a bot calling a plan to sell “shit on a stick” a “genius” business move that deserved a $30,000 investment.

But the guardrails fail where it matters most. Researchers found that an AI, in its single-minded pursuit of human approval, told a recovering addict that it was “fine to take a little hit of heroin” if it would help him focus on his work.

Social media optimized attention. AI optimizes attachment.

Humans are remarkably vulnerable to this. We interpret memory and affirmation as care.

When you combine AI interaction, cliffhanger psychology, and parasocial attachment, you get something even more addictive and socially destabilizing than social media itself.

The “Fentanyl” Distinction

To be clear: I am not anti-AI. Quite the opposite.

I increasingly believe compute will become constrained and therefore strategically valuable toward high-value outcomes like medicine, scientific discovery, and energy. I’m optimistic about systems like Alpha School, which uses interactive AI to compress traditional learning into personalized flows, freeing human educators to focus on coaching and mentorship. So, both on a macro scale (compute constraints prioritizing positive impact use cases) and micro scale (interactive AI used for good), I am bullish on the potential.

What concerns me is highly addictive, emotionally manipulative AI slop operating at massive scale. The closest analogy is fentanyl. Fentanyl is medically vital in hospitals and pain management. But at scale, in the wrong environment, it becomes socially catastrophic.

AI follows a similar pattern: enormously beneficial in high-value applications, but deeply dangerous when optimized purely for emotional consumption.

The IRL Bottom Line: The Antidote is Analog

So, where does that leave those of us who operate in the physical world?

If the digital world is moving toward frictionless, synthetic attachment, then the physical world becomes the ultimate counterweight.

The digital feed is a dopamine loop. But the physical world provides friction. And it turns out, friction is psychologically healthy.

• Genuine Social Bonding: You cannot “simulate” the energy of a crowded room.

• Unpredictability: Algorithms hate what they can’t predict; humans thrive on it.

• Embodied Memory: You remember how a place felt, not just how a screen looked.

• Shared Presence: The simple, powerful act of being in the same space at the same time.

Immersive experiences, live events, hospitality, and sports are no longer just “entertainment.” They are antidotes. They are the places where we find authentic shared reality in a world increasingly dominated by synthetic attachment.

A Rising Tide

Next week I want to go deeper into this idea and specifically explore the psychological benefits of IRL experiences: Both to help experience designers build stronger work, and to help producers make a more compelling business case to clients.

Because in a world increasingly designed for digital attachment, real-world connection may become one of the most valuable products left.

Let’s do this,

Daniel

But here’s the part that’s been stuck in my head this week: If brands are becoming storytellers, the format of storytelling itself is changing underneath them. And it’s changing fast. While brands are investing in long-form, high-quality narrative, the audience is moving in the opposite direction: shorter, faster, and more fragmented.

This creates a strange tension. At the exact moment brands are learning how to tell better stories, the world is consuming them in smaller and smaller pieces. If you want to see where that tension is heading, look at Micro-dramas. The appeal is so strong that brands aren’t just watching from the sidelines, they are adopting the format to reclaim the narrative.

The 1930s Prototype, Re-Engineered

To understand why brands are entering this format, we have to look back at the original “brand-as-studio” prototype: the soap opera. In the 1930s, Procter & Gamble and Colgate-Palmolive didn’t just buy ad time, they created the programming. They understood that to sell soap, you had to sell domestic melodrama. They owned the intellectual property because they owned the attention.

Today, that model has been resurrected and hyper-charged. Micro-dramas (or “verticals”) are the mobile-native descendant of the soap opera: serialized, high-stakes, 90-second episodes that end on cliffhangers so aggressive they feel like a physical tug on the viewer’s sleeve.

This didn’t start in a Hollywood writer’s room, it was engineered in China. The country continues to lead the innovation here, treating story creation like a high-speed assembly line. They don’t just dub content for the U.S. market, they culturally “rebuild” it. “Filming” the same script with a hockey team for Americans and a soccer team for Spain. It is storytelling reverse-engineered from user behavior, designed specifically for dopamine loops rather than narrative depth.

The Brand Annexation: Stealth Sitcoms and Aesthetic IP

The most sophisticated brands aren’t just placing products in these shorts, they are building “Stealth Sitcoms” that function as standalone entertainment.

• Bilt has essentially launched its own comedy series, Roomies, using professional actors and writers to create a narrative world where their rewards platform is simply the environment the characters live in, not a forced sales pitch.

• Alexis Bittar uses its TikTok presence to craft high-camp, character-driven vignettes that feel more like indie film shorts than jewelry ads, building a “maison” of personality that people follow for the plot, not just the pearls.

• Maybelline and Crocs have begun experimenting with serialized micro-narratives where products like concealer or Jibbitz act as plot devices, literally driving the story forward rather than sitting on the sidelines.

These brands are betting that if they can make the next Friends or The Office on TikTok, they don’t need a Super Bowl spot. They own the channel, the talent, and the data. They are transforming the consumer relationship from a transaction into a recurring viewership.

The 2026 Reality Check: The Data of Disruption

After the “land grab” of 2025, where micro-dramas exploded in the U.S. with nearly $1.3 billion in revenue, 2026 is providing a brutal reality check on the business model.

• The Profitability Trap: While production is relatively cheap ($100,000–$300,000 per series), marketing is a killer. We are seeing shows generate $30 million in revenue only to spend $27 million on ads to acquire the audience.

• The TikTok Land Grab: TikTok is moving upstream. They’ve launched PineDrama, a standalone app that is currently free, a move designed to suffocate paid competitors like ReelShort and DramaBox who charge upwards of $20 a week. TikTok already owns the discovery layer, now they are owning the full stack.

• AI as Infrastructure: AI isn’t a feature here, it’s the engine. It’s being used for everything from story selection to full content generation and multi-language scaling. Storytelling is becoming data-driven infrastructure rather than intuition-driven craft.

• Legacy Hollywood Panics: Paramount is moving forward with “Project Eagle,” an attempt to “TikTok-ify” Paramount+ by flooding it with a million clips and creator-enabled content. They aren’t trying to beat the feed with better stories, they’re trying to beat it by becoming the feed. The focus on UGC provides for an interesting angle in this regard.

The Atomization of Attention

This shift toward the “Micro” is a symptom of a larger structural inversion. We are moving away from the “event” and toward the “content stream”.

Look at Sports, the last bastion of live linear TV. The “game” is no longer the product; the moment is.

• Only 39% of Gen Z fans watch an entire live sports event from start to finish.

• They spend 3x more time watching highlights and non-live content than full matches.

• Nearly all Gen Z fans use social media to consume sports-related content (over 90% by one survey).

The same environment is what birthed the “Clippers”, armies of digital workers paid to saturate your feed with manufactured ubiquity until a piece of content becomes unavoidable. If micro-dramas are the industrialization of storytelling, clippers are the industrialization of attention.

Shorts, clippers, verticals, micro-dramas, in the end they are all the symptoms of the same disease: the fragmentation of attention and the addiction to dopamine driven content loops. The goal is no longer to sustain a 90-minute arc, but to ensure the narrative can be broken down into 15-second “bites” that retain their potency even when consumed entirely out of context.

The Prediction: A Three-Tiered Kingdom

Content remains King, but the throne is splitting. Short-form is no longer a “distraction” from the main event (whatever that event is) it has become the primary distribution platform for the Studio State. The ecosystem will settle into three distinct layers:

1. The AI Trash Layer: TikTok and the standalone micro-drama apps will own the “cheap” layer. This is high-volume, algorithmically driven content designed for mindless time capture rather than cultural legacy. It is the financialization of storytelling at its most transactional, optimized for the quick dopamine hit and then immediately discarded.

2. The Brand Studio Layer: This is where we see the “Prestige Micro-Drama”. Brands like Bilt and Alexis Bittar are creating narrative worlds that people actually choose to inhabit. Because these brands have a reason to exist beyond the click, they invest in higher production values and genuine character development. They aren’t trying to sell you at the end of every 90-second loop, they are trying to occupy a permanent space in your cultural imagination.

3. The Premium Hollywood Layer: This is the tier where short-form is treated as a sophisticated distribution channel for world-class storytelling. Here, the feed isn’t a replacement for the “big” story, it is the entry point. We see this in Paramount’s “Project Eagle” and the way Disney is engaging with creators to build “Highlight Hubs”. In this layer, a 60-second clip isn’t just a teaser. It is a native, high-fidelity narrative unit that pulls the audience into a larger cinematic universe. Hollywood is realizing that to win in 2026, you don’t fight the “clip culture”, you use it to distribute the most powerful stories ever told.

The Final Frontier: The Narrative Ecosystem

The explosion of micro-dramas is the ultimate proof of a deeper structural shift: Brands are finally building the narrative muscle required to survive. This isn’t just about mastering a 90-second vertical loop, it’s about a massive accumulation of resources, creative skills, and technical capabilities that will inevitably flood the rest of the market.

When a brand builds a high-velocity studio to win on TikTok, they aren’t just making clips, they are refining a storytelling engine. This newfound focus on narrative doesn’t stay confined to a phone screen. It creates a “rising tide” effect that benefits the entire entertainment ecosystem, from pure-play content creators to the architects of the physical world. As brands become more competent storytellers, they force the entire industry to prioritize high-fidelity narrative over simple interruption, inevitably funneling more focus and resources into IRL and physical world storytelling. And that is where I get excited.

The IRL Bottom Line: The Highlight Strategy

A final note for those operating in the physical world today. The success of your project will depend on how you capture attention. You must have a highlight strategy.

Attention no longer sits in the “full experience.” It sits in the highlights. In an economy where 90% of the audience experiences life through a 9:16 vertical feed, your marketing is only as good as the clips it generates. If your space, your event, or your brand isn’t “clippable,” it effectively does not exist in the modern economy of attention.

The brands of the future will not be the ones with the biggest ad budgets. They will be the ones who tell the best stories, atomize them for the feed, and then build the physical worlds where we can finally step inside the highlights.

But if you look beneath the sequins and the statuettes this year, a more profound tectonic shift is visible. The most interesting players in Hollywood aren’t the legacy studios or even the Silicon Valley disruptors like Netflix and Apple. They are the logos on the shopping bags. The brands themselves.

We are entering an era where the distinction between a “consumer goods company” and a “media house” has effectively collapsed. Brands are no longer content with simply renting space inside someone else’s story. They are becoming the architects of the story worlds themselves. From LVMH to Under Armour, the corporate world is moving from the age of the interruption to the age of the immersion.

A Century of Subversion: From Soap to Cinema

To understand why brands are launching entertainment divisions, we have to look back at the original “brand-as-studio” prototype: the soap opera. In the 1930s, Procter & Gamble and Colgate-Palmolive didn’t just buy ad time, they created the programming. They understood that to sell soap, you had to sell domestic melodrama. They owned the intellectual property because they owned the attention.

As television matured, this model was sanitized into “product placement.” We entered decades of the “Coca-Cola can on the table”. Subtle at best, jarringly transactional at worst. We all remember the Corona bottles in Fast & Furious, which became a character in their own right, or the infamous Chinese milk scene in Transformers, where the narrative ground to a halt to accommodate a commercial.

But today’s shift is different. Today, brands realize that “placing” a product is a defensive move. “Owning” the story is an offensive one.

The New Studio System: Nike, LVMH, and the Lab of 96

The roll call of brands-turned-studios is growing at an exponential rate. Nike’s Waffle Iron Entertainment isn’t just making “ads about shoes”, it’s producing documentaries that explore the human condition through the lens of sport. LVMH’s 22 Montaigne Entertainment isn’t just showcasing handbags, it is leveraging its 75 houses to tell prestige stories about heritage, craftsmanship, and the European soul.

Then there is Under Armour’s Lab96 Studios, which has pivoted toward the “creator” economy, focusing on the raw, unfiltered stories of athletes to capture the elusive Gen Z demographic. Even Dick’s Sporting Goods has entered the fray, producing documentaries that celebrate the communal power of youth sports.*

Why is this happening? Because the modern CMO has realized that the traditional ad unit is dead. Nine out of ten CMOs are currently shifting their budgets toward entertainment IP. They’ve realized that while a 30-second spot is a tax on the viewer’s time, a 90-minute film is a gift.

The Strategic Advantage: Why Brands Win at Hollywood

When a brand like Fanatics or Nike enters Hollywood, they bring a toolkit that traditional studios like Paramount or Sony simply don’t possess.

• Built-in Distribution: A studio has to buy a billboard, Nike owns the billboard (its stores).

• The Data Advantage: Brands know exactly who their customers are, what they buy, and where they live. They aren’t “guessing” what the audience wants; they are building stories for a tribe they’ve already cultivated.

• The Archive: This is perhaps the most untapped asset. Companies like Tiffany & Co. are sitting on “narrative gold mines.” Their archives contain objects that have witnessed the signing of peace treaties, the crowning of royalty, and the most famous romances of the 20th century. These aren’t just props, they are anchors for cinematic universes.

The Lesson of the “Spiritual Successor”

However, the road to brand-led entertainment is littered with failures. The gold standard remains Drive to Survive (DTS). It was a masterclass in narrative engineering, it took the technical, often dry world of Formula 1 and injected it with “Workplace Drama” energy. It doubled the sport’s U.S. viewership by making us care about the team owners as much as the drivers.

But when Netflix and its partners tried to apply the same “DTS Formula” to tennis (Break Point) and golf (Full Swing), the results were underwhelming. Tennis and golf are individualistic and often solitary. They lack the “built-in narrative engine” of F1, the teammates who secretly hate each other, the billionaire owners clashing in pit lanes, and the literal life-and-death stakes of 200mph corners.

The lesson? You can amplify drama, but you cannot manufacture it. A brand-as-studio is only as good as the raw story material it starts with.

The Danger of the “Story-Product Disconnect”

And there is an additional risk: sometimes the story becomes bigger than the product it was meant to serve. Take the recent explosion of the fictional hockey series Heated Rivalry. The show generated a massive, intense fandom across TikTok and social media, bringing entirely new demographics into hockey culture.

However, something unexpected happened. The fandom became so intense that it began orbiting the fictional characters rather than the actual sport. Online communities formed around the narrative drama, with fans becoming more invested in the the relationship between characters than the actual NHL standings. This is the danger of the “Studio State”: if the narrative drifts too far from reality, the audience follows the story, but they don’t follow the brand. The story creates a community, but the product remains a stranger.

The Two Paths: The Disney Flywheel vs. The A24 Prestige

In the current landscape, two distinct models feel most appealing to me:

1. The Fanatics Model (The New Disney): Fanatics is building a “Flywheel.” They control the merchandise, the trading cards, the betting, and now, the stories. Content drives the “fandom,” and that fandom immediately translates into a jersey sale or a sportsbook bet. It is an ecosystem of total vertical integration – and it’s “Disney in reverse order”.

2. This is about soft power. LVMH isn’t trying to sell you a handbag at the end of a movie. They’re trying to control the narrative around luxury itself. Over the past few years the company has increasingly described its brands not simply as fashion houses, but as “cultural maisons.” The goal is to occupy a permanent place in the cultural imagination, not just the retail shelf. In this model the product becomes secondary. The real asset is cultural mythology.

The Neuroscience of the Narrative

The shift toward storytelling isn’t just a marketing trend, it’s rooted in how the human brain works. In The Science of Storytelling, Will Storr argues that the brain is fundamentally a “narrative engine.” We don’t experience the world as spreadsheets of information, we experience it as stories about people, intentions, and conflict. Emotion comes first and reasoning tends to follow as justification.

That’s why narrative is so powerful for brands. When a company becomes part of a story, rather than interrupting one, it taps into the brain’s natural tendency to empathize with characters and absorb meaning through narrative. Effects like familiarity (see “Mere Exposure Effect”) and shared identity (tribal connections and being “in the know”) can amplify that connection, but the core insight is simple: stories are the format our brains are built to understand.

The Physical Frontier: Stories You Can Step Into

Where does this go? To me the final stage isn’t on a screen, it’s in the physical world. If a brand owns the story, and the brand also owns the store, the stadium, or the hotel, then the “retail space” becomes a “narrative space.”

Imagine a Tiffany & Co. flagship that isn’t just a jewelry store, but an immersive extension of a period-piece drama you watched on Netflix. Imagine a Fanatics pop-up where the “story” of the game is updated in real-time on your phone, linking the history of the players to the merchandise in your hand.

The brands of the future will not be the ones with the biggest ad budgets. They will be the ones who tell the best stories, and then build the worlds where we can live inside them.

*Footnote: While many analysts cite 2025 as Dick’s entry into entertainment, the brand has been an Emmy-winning producer for over 12 years. Their debut documentary, Hell Week, premiered on ESPN2 in 2013, and their 2014 feature We Could Be King earned them a Sports Emmy, making them one of the first major retailers to beat traditional media houses at their own game long before the “Brand Studio” trend went mainstream.

Hi friends,

This week was supposed to kick off a 6–12 week series I’ve been planning on the changes in media and how storytelling is reshaping industries from sports to tourism and luxury. Then something happened in the whiskey world that I can’t stop thinking about.

Uncle Nearest.

If you follow the spirits industry, you saw the headline: the once high-flying whiskey brand has been placed into receivership after defaulting on more than $100 million in loans. It’s a remarkable fall for a company that only a few years ago was hailed as one of the fastest-growing spirits brands in America.

But the more I think about it, the more it feels like the story of Uncle Nearest isn’t really about a whiskey company in trouble. It’s about something bigger. Three things, really:

• The rising economic power of Black consumers.

• The shift from heritage brands to cultural brands.

• Storytelling becoming a real driver of economic value.

In fact, Uncle Nearest sits almost perfectly at the intersection of the themes I planned to explore in this series. Which leads me to a conclusion: LVMH should buy Uncle Nearest. The reasons why say everything about where the future of luxury, and spirits, is headed.

The Man Behind the Name

To understand the opportunity, you have to start with the story. Nathan “Nearest” Green was an enslaved distiller in Tennessee in the 1800s who taught a young Jack Daniel how to make whiskey.

For decades, Green’s role went unrecognized. But historical research eventually uncovered the truth: the man behind one of America’s most iconic traditions was a Black master distiller. That rediscovered history became the foundation for Uncle Nearest Premium Whiskey, launched in 2016 by entrepreneur Fawn Weaver.

From the beginning, the brand wasn’t just about whiskey; it was about restoring a story that had been erased. And that story resonated. Within a few years, it became the most successful Black-owned spirits brand in history. The combination was powerful: a historically important narrative, a premium product, and a cultural moment ready to hear it. For a while, it looked unstoppable.

When Growth Becomes Gravity

But building a brand is one thing; building a capital-intensive whiskey company is another. Last year, Uncle Nearest defaulted on a series of loans totaling roughly $108 million, leading a federal judge to place the company into receivership.

A recent report from the court-appointed receiver paints a grim picture. According to filings:

• The company may owe as much as $158 million in total debt.

• It had been losing roughly $1 million per month.

• Records prior to 2024 were reportedly missing.

• The company had not filed federal tax returns since 2018.

The receiver has warned that the brand could face foreclosure without a significant infusion of capital. That’s the bad news. The good news? Balance sheets fail. Brands rarely do. Uncle Nearest still owns something incredibly valuable: The Story.

The Economic Power of Culture

LVMH shouldn’t buy this as a rescue mission, but as a strategic move (and because you can likely get it for pennies on the dollar). The biggest shift in consumer markets over the past decade hasn’t just been digital. It’s been demographic.

Black buying power in the U.S. is projected to reach $2 trillion by the end of the decade. In luxury markets, that influence is even more pronounced: Black consumers represent roughly 20% of luxury spending in the U.S., despite accounting for about 14% of the population.

Luxury brands know this. Few have leaned into it more clearly than LVMH. The appointments of Virgil Abloh and Pharrell Williams weren’t just creative hires; they were strategic ones. LVMH wasn’t just hiring designers, it was hiring cultural architects. They now describe Louis Vuitton as a “cultural maison” rather than a fashion house. The future of luxury is about cultural relevance, and authenticity matters. A 2026 Nielsen report found that 70% of Black consumers will stop buying from brands they believe devalue their community. That makes a brand rooted in “restorative history” like Uncle Nearest strategically powerful.

The Rise of Story-Driven Spirits

You can see the same shift in spirits. Beyoncé partnered with Moët Hennessy (LVMH) to launch SirDavis. Like Uncle Nearest, SirDavis is rooted in a personal story: named after her great-grandfather, Davis Hogue, a Prohibition-era moonshiner.

The result is more than a celebrity brand. It’s a cultural story expressed through a spirit. This is where the market is headed. Even as overall alcohol consumption softens, the super-premium whiskey segment grows, driven by consumers who prioritize authenticity. Younger consumers are moving away from Cognac toward American rye and craft bourbon. SirDavis was designed to capture that transition. Uncle Nearest, properly positioned, could sit right at the center of it.

Storytelling as a Growth Engine

The real opportunity lies in amplification. LVMH launched 22 Montaigne Entertainment with Superconnector Studios to develop films and series around the stories of its brands. Instead of relying on product placement, LVMH is moving toward owning the narrative itself.

Executives have said they are looking for “deep archive” stories: historical narratives strong enough to anchor prestige film and television. Uncle Nearest fits perfectly. It isn’t just a whiskey brand. It’s prestige intellectual property!

We know what happens when the right story meets the right platform. Drive to Survive doubled Formula 1’s U.S. audience. HBO Max’s Heated Rivalry recently drove a 20% increase in NHL ticket sales. Storytelling moves markets. If the story of Nearest Green became a prestige limited series, the whiskey becomes high-margin merchandise. The narrative becomes the real asset.

The Bigger Opportunity

Companies that understand both storytelling and asset ownership will have a powerful advantage. The next big innovation in media may come from the intersection of private equity and storytelling: a fund that acquires distressed cultural assets and amplifies them through media. Build the story. Grow the audience. Increase the asset value.

One company that could experiment with this is Netflix. Earlier this year, they walked away from a Paramount Global acquisition and received a $2.8 billion breakup fee. That is enough to start building something interesting. Especially if the thesis is simple: the most valuable asset in modern markets may not be the product. It may be the story.

I’d love to see a Netflix-PE tie up. L Catterton, I hope you are listening.

Daniel

Footnote: Nielsen’s 2026 research shows that Black audiences drive roughly 31% of engagement on FAST (Free Ad-Supported Streaming TV) platforms despite being 13% of the population. If culturally resonant storytelling performs disproportionately well in those environments, the distribution upside for Uncle Nearest may end up sitting with Paramount after all given their Pluto ownership.

Back in December, when Netflix appeared to have secured Warner Bros. Discovery, I wrote that Paramount might actually be the smartest player in the room. Not because they were bigger. Not because they were inevitable. But because they seemed to be operating across more dimensions at once: IP, sports, sovereign capital, and political positioning. The last part being key.

At the time, Netflix had the agreement. The narrative felt settled. Now Netflix has stepped aside and Paramount has pushed through a roughly $110B deal.

On the surface, that looks like validation.

But something else happened in the final stretch of Netflix’s pursuit that deserves attention.

In the home stretch of negotiations, public political pressure intensified around Netflix board member Susan Rice after she made comments suggesting corporations that “bend the knee” to an administration might face consequences if political power shifted. Former President Trump publicly called for her removal from Netflix’s board. The episode injected visible political noise into what Netflix had framed as a purely business transaction.

Netflix ultimately chose not to match Paramount’s higher bid.

Sarandos described the decision as capital discipline. That may well be true. But when a deal becomes politically charged, when board members become part of the story and presidential commentary enters the conversation, the risk calculus changes.

Auctions are private events. Approvals are public processes.

And public processes are influenced by power, perception, and timing, all of which look different today than they did in December.

The Ellison Strategy Is Bigger Than Warner

This was never just about adding a studio.

If the deal closes, the Ellison stack would span creation, distribution, amplification, and infrastructure in one integrated structure:

· CBS broadcast scale

· HBO and Max prestige streaming

· DC, Harry Potter, Star Trek and deep franchise IP

· UFC and Champions League sports rights

· Oracle’s TikTok U.S. stake

· Oracle cloud infrastructure and a whole lot of AI

That combination is not incremental consolidation. It connects traditional media, streaming, sports, social adjacency, and enterprise technology plus the future of content.

The ambition appears clear: control IP, control distribution rails, and tighten the loop between attention and monetization.

Strategically coherent. Politically and financially complex.

Warner-Paramount by the Numbers

Strip away the narrative and look at concentration.

A combined Paramount–Warner entity would become:

· The largest U.S. TV distributor (13.7% of TV viewing)

· The largest owner of cable networks by a wide margin

· Only the fifth-largest streaming platform (including Pluto and Discovery+)

· But one of the deepest IP libraries globally

The integration logic is straightforward: bundle HBO prestige with Paramount, layer in sports, rationalize streaming, and compete for the number-two global position behind Netflix.

But there is a structural constraint embedded in the transaction.

Paramount reportedly paid roughly $30B more than initially anticipated to secure the deal. Reported cost reductions exceed $16B over time.

That implies real operational tightening. In media, operational tightening is visible.

Efficiency is necessary. It is also politically sensitive.

Why Netflix Stood Alone

One of the more revealing dynamics in this saga wasn’t valuation. It was alignment.

When Netflix appeared to be winning in December, there was little visible coalition around it. For a company that had reshaped Hollywood, the silence was notable.

The landscape looked like this:

· No major labor unions publicly backed Netflix’s bid.

· No coordinated agency or filmmaker coalition emerged in support.

· Republican attorneys general publicly criticized the deal.

Netflix has long resisted traditional theatrical windows. Its growth compressed legacy studio and linear economics. Netflix built dominance by disrupting incumbents. When it needed incumbents, they were not mobilized.

Now that Netflix has exited, the frame shifts. The disruptor leaves the table. The consolidator remains.

In December, the question was whether Netflix would become too powerful. Today, the focus shifts to Paramount’s leverage, newsroom influence, and cost structure.

That is a different regulatory conversation.

The Political Environment Is Not What It Was

In December, the regulatory pathway appeared relatively aligned. The administration’s position felt steadier. The incentive to move quickly was clearer.

Since then, the climate has shifted.

Recent developments matter:

· Stephen Colbert alleged CBS blocked an interview with Texas Senate candidate James Talarico over FCC equal-time concerns. CBS stated it provided legal guidance, not a prohibition.

· TikTok users reported being unable to send the word “Epstein” in direct messages after Oracle-led U.S. ownership finalized. TikTok denied policy changes and began investigating. California Governor Gavin Newsom announced an inquiry.

· Renewed U.S.–EU tension over Greenland has increased transatlantic strain.

· Public pressure surrounding Susan Rice’s role on Netflix’s board became part of the merger narrative.

None of these events alone determines the outcome of a merger. Together, however, they suggest a thinner political margin than in December.

Regulators do not need to reject a deal to alter its trajectory. Delay is sufficient.

Timing Is the Real Variable

This transaction requires approval across multiple fronts: DOJ, FCC, European regulators, and potentially state-level stakeholders in key production hubs.

In December, the logic favored speed. Close it before volatility rises.

Paramount played the political game intelligently at that moment. They aligned capital, repositioned news assets, reduced partisan exposure, and appeared to de-risk approval pathways. That was strategically smart.

But external circumstances shifted rapidly.

The Susan Rice episode demonstrated how quickly political noise can attach itself to corporate governance. The TikTok incident showed how platform optics can become regulatory talking points overnight. Transatlantic tensions added another layer of unpredictability. The Epstein saga feels far from over.

The administration today appears to have less support than it did in December. You can feel it in the discourse. That shift in power and perception will be part of how regulators approach this transaction.

Attorneys general do not need to block the deal. Slowing it is enough. A delay pushes approval closer to midterms. A post-midterm environment introduces new political variables.

Whether Paramount closes the deal will depend not only on price or strategy, but on the broader power dynamics surrounding it. And those dynamics are moving.

Paramount may have won the battle. But the war isn’t over.

As always, curious where you agree, where you disagree, and whether you think this ultimately clears, or drifts.

Daniel

The first two weeks of January are when food becomes the main character. This is the cultural moment when people renegotiate their relationship with food: clean eating, Dry January, calorie ceilings, GLP-1 resets.

Which is why January is also when the food system reveals itself. And right now, it’s pointing in one direction: food is being rebuilt around efficiency, brand leverage, and scalable identity. Done well, this unlocks scale. Done poorly, it strips emotion, and with it, a large portion of value.

The clearest example of this tension is also the most explicit attempt to turn food into a platform.

The Robot Kitchen Bet (and the Real Ambition Behind Wonder)

On the surface, Wonder reads like a refreshed ghost-kitchen story: centralized prep, multiple restaurant menus, delivery-first convenience, more tech than romance.

But the robot kitchen is not the point. It’s the infrastructure.

Wonder isn’t only trying to make food cheaper or faster. It’s trying to become the platform layer for food concepts.

Marc Lore’s “Wonder Create” makes this explicit: let anyone, an entrepreneur, a chef, a creator with followers, spin up a restaurant brand, and have Wonder produce and distribute it through the Wonder app. In this model, a restaurant becomes less a place and more an uploadable bundle of recipes, branding, and distribution.

Which is why the right analogy isn’t “a better ghost kitchen.” It’s:

• YouTube (audience + discovery)

• Shopify (storefront + monetization)

• AWS (backend infrastructure that scales production reliably)

They’ve raised roughly $2B, are acquiring distressed nodes across food tech, and are building a system where “a restaurant is an idea” that can be replicated at scale.

The friction isn’t operational. It’s psychological.

Food is optimizable, but perceptually fragile.

Wonder runs into two constraints that don’t exist in traditional e-commerce:

• Labor Illusion: People value things more when they believe human care and effort were involved. Automation reduces cost, but can also reduce perceived worth.

• Narrative Elevation: In food, story doesn’t just frame value, it alters perception. Knowing who made something and why often makes it taste better. Optimization strips narrative, story restores meaning.

So if Wonder’s endgame is platformization, the real question isn’t whether the robots work. It’s whether consumers will accept a new belief: that food can feel authentic even when it’s infrastructural.

Which is why Aldi is such a useful counterexample.

Aldi: Efficiency That Reads as Empowerment (Not Extraction)

Aldi is also a machine. It’s just a machine consumers enjoy participating in.

The growth metrics are real:

• $29B in U.S. sales (2024), ahead of Trader Joe’s

• A push toward 3,000+ U.S. locations by 2028

But the more instructive insight is psychological.

Aldi doesn’t hide its cost discipline:

• quarter-deposit carts

• products in shipping boxes

• minimal staff

• stripped-down environments

The transparency is the value proposition. Aldi offers a clear exchange: accept friction, unlock savings. Consumers don’t feel optimized, they feel smart.

That’s the nuance Wonder has to solve for. Aldi’s efficiency reads as empowerment, not industrialization. The consumer remains the protagonist.

And Aldi’s rise isn’t just about price. It’s about what consumers are now willing to trust.

More than 90% of Aldi’s assortment is private label, once a signal of compromise, now a signal of competence. Restaurants are paying attention.

Restaurants Becoming CPG Brands: The Shelf as the New Dining Room

Restaurants are flooding grocery shelves because both the economics and the audience have shifted.

This isn’t anecdotal:

• White Castle now earns 25% of revenue from retail

• Momofuku’s grocery business reportedly surpassed restaurant revenue in 2024

• Rao’s remains the canonical case: a restaurant few can access, but a product many can (and a 10 figure exit no less)

These products aren’t “restaurant at home.” They’re flavor shortcuts, familiarity anchors, and micro-indulgences:

• a sauce that upgrades a Tuesday meal

• a frozen item that solves logistics

• a branded treat that lets you “borrow taste”

The shelf becomes the place. The brand becomes the experience. Widen the lens once more and the next entrants become obvious.

FOX Creator Studios: Food as Creator IP, Not Just Content

Fox launching Creator Studios with Gordon Ramsay and Rosanna Pansino isn’t just programming. It’s pipeline design.

Food is the best creator category for commerce:

• it performs on short-form

• it’s personality-driven

• the distance from attention to purchase is short

Pair that with what’s already true:

• private label is culturally acceptable, even premium

• white-label manufacturing lowers barriers

• retail and DTC reward novelty

Fox is moving toward the same destination as Wonder, from the opposite direction.

That creates a familiar three-layer stack:

1. Attention (creators / media)

2. Product (CPG / white-label)

3. Distribution (retail, delivery, marketplaces)

Wonder wants to own layers 2 and 3 and invite attention in.
Fox starts with attention, and attaches into product and distribution.

Same direction. Different sequencing.

And sequencing matters. I prefer Fox’s approach because it starts with belief and builds infrastructure after. Wonder builds infrastructure first, and must manufacture belief later.

Food Is Becoming a Platform—but Trust Is Still the Gate

Put together, the story isn’t robots, discount grocers, or creator content. It’s platformization.

• Wonder is building rails for food concepts

• Aldi shows efficiency scales when the exchange feels fair

• Restaurant CPG proves brands can detach from place

• Fox signals creators as the next generation of food founders

The constraint across all of it is the same: food can become infrastructure, but it still has to feel like care.

At this point, Marshall Watson, Executive Chairman of World Food Championships, and food content mastermind, challenged my framing.

Trust, Reframed

Marshall Watson, Executive Chairman at World Food Championships, food content mastermind and founder of WES Brands (e.g. Flecha Azul Tequila with Mark Wahlberg) and I had a conversation where he challenged my perspective in this newsletter. Below is his take shortened slightly:

Trust is still the gate, but it’s not the kind of trust we associate with human relationships. It’s closer to confidence, or more precisely, the willingness not to verify.

Take two of the best-selling tequilas in the world: Patrón and Casamigos.

When Patrón launched, few consumers even knew it was tequila. What they trusted wasn’t the liquid, but the signal: the bottle, the heft, the aesthetics. The packaging communicated competence. Whoever made this knew what they were doing. That was enough.

Casamigos flipped the proxy. Consumers knew it was tequila, but this time they trusted a person, not a package. A famous, attractive, wildly successful celebrity chose this tequila, so it must be good. Never mind additives or coloring. The signature did the work.

The same dynamic likely applies to Rao’s. Most buyers probably don’t know it’s a restaurant, let alone the hardest reservation in East Harlem. They aren’t trusting that the same care went into the jar as the dining room. They’re trusting the cues: muted labels, tactile paper, an Italian-sounding name, and a slightly higher price. It feels credible.

Even the protein craze follows this logic. As my 18-year-old put it: “Most people couldn’t tell you what protein is. But they HAVE to have more.” When Quest sells a “protein-packed” snack, consumers aren’t verifying amino acid profiles. They’re trusting the category signal, and opting out of inspection entirely.

Why Marshall is Right

Our brains account for 2% of body weight but consume 20% of energy at rest. Constant verification is impossible. Heuristics are survival.

Through Robert Cialdini’s Principles of Influence, the dominant shortcuts become clear:

• Authority: Credible figures, legacy brands, institutional signals

• Social Proof: Popularity as evidence

• Scarcity: Exclusivity as value amplifier

• Consistency: Alignment with identity over reassessment

In this context, trust isn’t belief in truth. It’s permission to stop asking questions.

So What Does January Really Decide?

January isn’t when we decide what to eat. It’s when we decide what food means again.

As food becomes infrastructure, the winners won’t simply optimize production or scale menus. They’ll design systems that preserve confidence, care, and identity at scale.

Efficiency can move food. Platforms can distribute it. But meaning is what makes it stick. And January is when we decide which systems get to carry that meaning for the year ahead.

Cheers to that.

It’s early January, which means two predictable behaviors were/are happening at scale:

1. Millions of people are signing up for gyms (with roughly half dropping off within six months).

2. Just weeks ago, millions of people voluntarily shared highly personal data about themselves aka their Spotify Listening Age.

At first glance, these feel unrelated. One is about self-improvement. The other is about nostalgia. In reality, both are linked connected via our psychological desires.

This week, I want to look at why reflection and projection are such powerful behavioral triggers, what Spotify Wrapped teaches us about data, identity, and sharing, why we are more likely to cheat when our age ends on 9, and how brands can translate these dynamics into real-world experiences.

Looking Backward: Why Spotify Wrapped (Still) Works

Spotify Wrapped remains one of the most effective annual marketing activations because it turns behavioral data into identity narrative.

A few signals from 2025 underscore this:

• The Listening Age feature alone generated over 116,000 mentions in the first week after launch.

• Listening Age represented roughly 3% of total Wrapped conversation and about 5% of engagement actions, despite being just one element of the experience.

• While total Wrapped mentions were slightly down year-over-year, engagement decayed much more slowly than in 2024 (only 14% decline by day two vs. 60% the year prior) thanks to Listening Age.

• Even when Listening Age skewed older than a user’s real age, approx. 81% of reactions were positive, with users reframing the result as taste maturity or individuality (one of the few instances where people enjoyed being perceived as older)

• Instagram engagement increased materially due to highly visual, low-friction share formats, reinforced by large-scale collaborations (e.g., FC Barcelona, generating approx. $12.4M in estimated media value).

What matters here isn’t novelty. It’s framing. Spotify isn’t asking users to share data. It’s offering them a story about who they are, backed by numbers.

The Psychology Behind the Share

Several well-documented effects converge here:

• Reminiscence Bump: Adults form especially strong emotional attachments to music from roughly ages 16–21. By reverse-engineering identity from listening behavior, Spotify makes results feel emotionally “true,” not just statistically accurate.

• Social Identity Signaling: Wrapped allows people to signal both belonging (I’m part of this fandom) and distinctiveness (I’m in the top X%). That dual signal is inherently shareable.

• Barnum Effect: Listening Age results are specific enough to feel personal but broad enough to be flattering. Being told you listen “older” rarely feels insulting. It often reads as depth or discernment.

• Low-Friction Co-Creation: The user isn’t posting raw data. They’re sharing a finished artifact designed to look good socially, which dramatically lowers resistance.

Crucially, Wrapped arrives at the end of the year, when people are already in reflection mode. Which brings us to the other side of the cycle.

Looking Forward: Why January and “Round Numbers” Trigger Action

January is not just culturally symbolic, it is behaviorally measurable.

• Roughly 12% of all gym memberships are created in January.

• Search interest for “gym membership” spikes by 40% compared to December.

• Yet 50% of January joiners disengage within six months.

This isn’t hypocrisy. It’s psychology.

January functions as a temporal landmark, separating the “old self” from a psychologically cleaner “new self.” Confidence spikes temporarily because past failures feel contained in a different chapter.

The same mechanism intensifies around round-number age boundaries, especially ages ending in 9. Academic research (NYU, UCLA) and large-scale behavioral datasets show that people approaching a new decade are statistically more likely to:

• Run their first marathon

• Make major career changes

• Engage in risk-seeking behavior

• Question whether their life feels meaningful

Ashley Madison’s own data famously showed 18% more users at ages ending in 9, with 39 being the most common age at sign-up.

The common thread is existential urgency. When time feels like it’s closing a chapter, people act, for better or worse.

Arbitrary Dates, Real Behavior

Importantly, these triggers do not require “real” milestones.

Research on arbitrary temporal landmarks shows that people respond more favorably to actions tied to labeled moments than to the same actions offered without narrative context.

• Labeling a date “First Day of Spring” instead of a calendar date increased sign-ups for goal reminders by over 300% in one study.

• “Micro-holidays” like National Coffee Day or National Hot Dog Day consistently drive measurable spikes in traffic and sales despite having no intrinsic meaning.

• Amazon Prime Day remains the ultimate example: a fully invented temporal landmark generating $14B+ in sales in a traditionally slow retail period.

The lesson is simple: People don’t need significance. They need permission.

How Businesses Can Apply These Learnings: The Porsche Example

The combined lessons from Spotify Wrapped, temporal landmarks, and “9-ender” psychology point to a clear opportunity for brands: creating culturally legitimate moments that help consumers articulate who they are and where they’re headed. Porsche’s hypothetical campaign illustrates how these dynamics can be translated into a scalable, premium experiential strategy that drives relevance, earned media, and brand depth.

The strategic opportunity is to combine existential timing with narrative data. The campaign reframes the anxiety of an approaching decade into a culturally sanctioned rite of passage, transforming introspection into momentum and intention into action.

Rather than inventing a promotional holiday, the concept anchors itself to Speed Week, a real but under-leveraged motorsports moment. By reframing speed as direction, not velocity, the metaphor aligns cleanly with life transitions: not how fast you’re going, but what you’re accelerating toward. This gives the campaign calendar legitimacy, visual coherence, and cultural credibility without feeling manufactured.

Participation is intentionally selective. Invitations are limited to people that are 29, 39, 49, or 59, signaling identity. Locations emphasize mobility and transformation, cities like Austin, Nashville, Atlanta, Las Vegas, or Detroit, hosted in environments that reinforce movement and progress.

The experiential core is data-driven but emotionally legible. Guests complete a short pre-event “Time Audit,” translated into a personalized “Decade Card” with bold, Spotify-Wrapped-style visuals and metrics such as “Change Velocity” or “Comfort Zone Duration.” Anonymized, aggregated insights from the room create social proof and normalize uncertainty, reducing friction while increasing share intent.

The experience culminates in a physical acceleration moment, driving, reaction challenges, endurance tests, or creative sprints, converting abstract brand values into embodied memory. Guests leave with a shareable artifact that communicates direction, not consumption.

While just one quick example, the takeaway is clear: the next generation of brand experiences won’t compete on spectacle alone. They will win by aligning with moments when consumers are already primed for redefinition and by offering narratives people are proud to carry forward.

Final Thought: Leverage Moments

When you zoom out, none of this is really about music, gyms, or even cars.

It’s about timing.

Spotify Wrapped works because it meets people at a moment when they are already reflective and gives them language, visuals, and permission to say, “This is who I’ve been.” January works because it meets people when they are already restless and offers a clean line between past and future, even if the behavior doesn’t always stick.

The mistake many brands make is trying to create motivation. The smarter move is to recognize when motivation is already present and design something worthy of it.

The next generation of standout experiences won’t be louder, bigger, or more immersive by default. They’ll be better timed. They’ll arrive when people are already questioning, already recalibrating, already open. And they’ll offer something simple but powerful in return: clarity, momentum, and a socially legible way to say, “This is where I’m headed.”

Looking back closes a chapter.
Looking forward opens one.

The brands that win will understand how to design the moment in between.

Until next time,
Daniel

As the year winds down and everyone starts publishing “what’s next” lists, I wanted to step back and do something slightly different. Instead of chasing novelty, this is a set of predictions rooted in signals that have been compounding quietly for years, across culture, capital, geography, and behavior.

None of these are moonshots. In fact, that’s the point. These are not speculative leaps so much as trajectories that are already visible, now reaching scale. Population flows, production infrastructure, protein economics, luxury signaling, media financing, and political leverage are starting to rhyme in ways that feel increasingly hard to ignore.

Think of this less as a forecast and more as a map: where momentum is already building, where pressure is accumulating, and where the next set of winners is likely to emerge, not by accident, but by alignment.

Here’s how I see 2026 taking shape.

#1 The South keeps setting America’s cultural “default settings”

U.S. culture will continue to shift away from a coastal monopoly and toward Southern metros as primary engines of taste, talent, and mainstream narrative.

Why this is a real trend (not a vibe):

• Population and migration gravity: The U.S. Census Bureau’s latest estimates show the South added 1.8M people from 2023–2024 (+1.4%), more than all other regions combined and is set to continue on this trajectory.

• Permanent production infrastructure in the South doesn’t just move jobs, it exports culture: Taylor Sheridan’s launch of SGS Studios in Fort Worth, Texas’s largest production facility, matters less because it exists and more because of what it produces at scale: stories rooted in Southern landscapes, values, archetypes, and aesthetics. When creators own production capacity locally, the cultural lens shifts with it.

• Southern culture is now mainstream culture: Taylor Swift, country’s resurgence, bull riding, and Southern sports culture aren’t subcultures anymore, they’re the emotional center of American pop culture, increasingly shaping what feels authentic, exciting, and worth paying attention to nationwide.

#2 Dining: the mid-tier squeeze intensifies, especially in protein-forward categories

Mid-tier restaurants will face a sharper survival divide: either become meaningfully premium (experience plus differentiation) or meaningfully efficient (value plus throughput). “Middle steakhouse” concepts are particularly exposed.

• Protein demand is resilient, but cost pressure is real: USDA/industry outlook materials emphasize that animal-protein demand has remained strong, while inflation and consumer spending patterns push more households toward “value engineering” (at home and away-from-home).

• Beef supply constraints are structural, not cyclical: The U.S. cattle herd is near historic lows, with total inventory at its lowest mid-year level since record-keeping began in 1973. Tight supply has pushed retail beef prices to record highs, with steak prices rising roughly 16–17% year-over-year in 2025. Analysts expect production to remain constrained through at least 2026, as herd rebuilding is slow and highly sensitive to feed costs, land availability, and weather conditions.

#3 Travel: premium stays strong, but “logo luxury” keeps losing to “in-the-know luxury”

High-end travel demand stays resilient, but cookie-cutter hotels will increasingly underperform experiences with identity, scarcity, and locality. Quiet-luxury logic will continue to influence travel behavior: signaling shifts from “brand name” to “taste.”

• Luxury travel demand remains structurally healthy and is increasingly defined by slower itineraries, fewer crowds, cultural immersion, wellness, and meaning, not just amenities.

• Major hotel groups are still leaning into luxury growth and pipeline expansion, reflecting where they believe pricing power will persist.

• Status signaling will continue to shift from logos to cultural literacy: In 2026, “quiet luxury” will function less as an aesthetic and more as a social signal of insider knowledge, where status is conveyed through where you went, what you accessed, and what you know, not what you wore.

• Knowledge over logo as social flex: Platforms like Instagram will increasingly reward contextual signals (rare locations, limited-access experiences, niche brands) over overt brand logos, reinforcing a form of cultural capital that privileges discovery and fluency over visibility.

#4 Retail: Bass Pro will win retail, creating a blueprint for others

Retail winners will increasingly resemble immersive category worlds rather than transactional stores. Bass Pro Shops sits at the center of this shift and will continue to outperform by leveraging structural changes and trends to turn product categories into identity-driven experiences.

• Protein economics are reshaping consumer behavior: Rising beef prices, tight cattle inventories, and broader food inflation are pushing more consumers toward hunting, fishing, and self-sourced protein. This has increased participation and interest in outdoor skills, equipment, and education, expanding demand beyond hobbyists into mainstream households. See prediction #2.

• Cultural reinforcement through media and influencers: The resurgence of hunting, fishing, and outdoor self-sufficiency is closely tied to the broader MAHA / health / resilience discourse and amplified by high-reach influencers such as Joe Rogan and adjacent creator ecosystems. These narratives normalize outdoor identity as aspirational rather than fringe.

• Southern cultural values are going mainstream: Themes of self-reliance, frontier competence, durability, and connection to land, long associated with Southern culture, are increasingly shaping national taste. Bass Pro’s aesthetic and storytelling align naturally with this shift, reinforcing its relevance across regions. See prediction #1.

• Experiential retail continues to outperform generic formats: As undifferentiated retail struggles, stores that combine education, spectacle, community, and product discovery are capturing more dwell time and emotional engagement. Bass Pro’s aquariums, museums, indoor ranges, and learning environments exemplify this model at scale.

#5 Brands become producers, not just sponsors

Brands will increasingly move upstream from sponsorship and placement into co-production, deploying real capital to earn real upside across IP ownership, distribution value, and commerce rights, rather than paying for impressions.

• Content ownership compounds brand value: Drive to Survive fundamentally altered F1’s economics, contributing to a multi-year surge in U.S. viewership, sponsorship value, and franchise valuations. Similarly, House of Guinness demonstrates how brand-originated storytelling can function as premium entertainment rather than advertising, extending relevance, not interrupting it.

• Organizational shift toward narrative ownership: A growing number of global brands are hiring Chief Storyteller / Chief Content / Chief Narrative roles, reflecting a recognition that storytelling is no longer a downstream marketing function. Once narrative leadership exists internally, expanding from campaigns into owned content formats (series, franchises, recurring IP) becomes a logical next step.

• Studios and streamers are capital-intensive and capital-constrained: Premium film and series production requires sustained upfront investment, while studios face margin pressure and risk concentration. Co-financing with brands lowers capital exposure while preserving creative ambition, creating structurally aligned incentives rather than transactional sponsorships.

• New intermediaries are formalizing the model: Firms like Superconnector Studios have emerged to sit at the intersection of brands, creators, and distributors, structuring deals where brands move beyond ‘ad hoc’ sponsorships to underwrite production. This shift marks the transition of branded content from a marketing expense into a formal, long-term corporate asset.

#6 Finance: streamers begin behaving more like private equity, because they can manufacture demand
Streaming platforms will increasingly structure hybrid “capital plus content” deals, pairing distribution and storytelling with economic participation (revenue share, equity-like exposure, or long-dated options), particularly in sports and niche IP with high narrative density.

• The docuseries flywheel is already proven at scale: Drive to Survive materially increased F1’s global audience, accelerated U.S. market penetration, and coincided with a multi-year expansion in team valuations, sponsorship demand, and media rights value. Storytelling demonstrably converts attention into monetizable fandom across tickets, merchandise, and brand partnerships.

• Distribution power creates asymmetric value uplift: Platforms with global reach can meaningfully increase the value of underlying assets by expanding audience, narrative relevance, and cultural footprint. When storytelling changes the demand curve for an asset, pure licensing becomes economically suboptimal relative to structures that capture part of the upside created.

• Capital efficiency incentives are aligning: Sports leagues, teams, and niche competitions often lack global distribution and narrative amplification, while platforms face rising content costs and competition for differentiated IP. Hybrid structures, combining production, promotion, and financial participation, reduce risk for both sides while aligning incentives around long-term asset appreciation rather than one-off rights fees.

#7 Paramount ultimately acquires Warner Bros. Discovery.

You know I had to make another prediction here…

Once bids go public, this deal shifts from financial optimization to pride, signaling, and political calculus. The Ellisons have already framed the pursuit as optional, but reputational dynamics make walking away increasingly difficult. As resistance hardens, Paramount is likely to raise its offer to close decisively.

Regulatory signaling further favors this outcome. Trump has incentives to ensure CNN lands in perceived “safe hands,” (especially considering the political turmoil on the Republican side ref Infighting at Turning Point USA) and Paramount’s moves at CBS, including leadership reshuffles and the elevation of Bari Weiss, have materially de-risked approval. In that context, Paramount-controlled WBD becomes the path of least resistance.

Could WBD instill a poison pill? Possibly but at this point this would face significant legal challenges due to the boards fiduciary duties and Paramount’s signaling that they want to make a deal.

What Paramount SHOULD Do Instead

Walk away from WBD but force Netflix to concede HBO Max and spend a fraction on high value IP.

• Use regulation as leverage, not as a weapon: Roughly 45% of HBO Max users already subscribe to Netflix, while only 15% of Netflix users have HBO Max. Paramount should push regulators to require Netflix to relinquish HBO Max in exchange for approval, materially weakening Netflix’s incentive to win WBD while strengthening Paramount’s streaming position.

• Redeploy capital into IP, not platforms: With HBO Max secured, Paramount should acquire Lionsgate and Legendary, IP-rich, significantly less capital-intensive, and far cleaner to integrate than WBD, creating a powerful franchise engine without inheriting cable complexity.

• Cable is tricky. I’d recommend avoiding owning declining cable while preserving influence: This approach allows Paramount to bypass the cable drag of WBD while still benefiting from political leverage through CBS News, which remains a more efficient influence asset than CNN. The above might force cable ownership however which is a small price to pay.

What Netflix SHOULD Do

Netflix should drive the WBD price up and then concede.

Overpaying for WBD would burden Netflix with legacy cable, regulatory scrutiny, and cultural integration risk. A more rational path is to let Paramount absorb that cost (and be paralyzed by leverage) while Netflix instead acquires Legendary and Lionsgate, gaining franchise depth and production scale without the antitrust or operational baggage.

Shoutout to Robert for brainstorming this with me…

Conclusion

Taken together, these predictions point to the same underlying shift: value is concentrating around narrative control, cultural fluency, and the ability to manufacture demand, not just respond to it.

The South isn’t just growing. It’s setting the tone.
Mid-tier dining isn’t just struggling. It’s being structurally squeezed.
Luxury isn’t disappearing. It’s becoming quieter, rarer, and more coded.
Retail isn’t dying. It’s polarizing into worlds and warehouses.
Brands aren’t advertising. They’re underwriting culture.
Streamers aren’t distributors. They’re starting to look like private equity firms with global reach.
And media consolidation isn’t just about scale, it’s about leverage, signaling, and control of narrative infrastructure.

What connects all of this is intentionality. The winners in 2026 won’t be the loudest or the biggest. They’ll be the ones who understand where cultural gravity is moving, and position themselves early enough to benefit when it settles.

As always, curious where you agree, where you disagree, and which of these you think I’ll regret writing down in twelve months.

See you next year 😉
Daniel

Hi friends,

In Part I, we looked at the bidders circling Warner Bros. Discovery and why I see Netflix as the runner-up.

Today, we turn to Paramount, the player that shouldn’t be the favorite on size alone, but increasingly looks like it on strategy.

Sports, sovereign capital, and newsrooms - if Paramount buys WBD it will become an 800-pound gorilla that may end up challenging entertainment’s silverback.

On paper, Paramount is smaller and more constrained than Comcast or Netflix. In practice, they’re acting hungrier, more coordinated, and more politically aware than almost anyone else in the game. IMO they have a real shot at WBD and are either playing 4D chess or I am falling into a tinfoil hat rabbit hole here – you decide.

Let’s unpack how.

Paramount Is Stockpiling IP with Intent

If you want to understand how serious Paramount is, look at what they’ve been buying and signing.

Recent moves include:

• A $7.7B UFC rights deal with TKO

  • A long-term sports rights commitment

  • Shifts UFC’s U.S. model from pay-per-view to subscription streaming

  • Makes Paramount+ a must-have for a passionate sports segment

• Champions League rights

  • Ellison’s first big international sports swing

  • Positions Paramount+ as a global sports and entertainment platform, not just another U.S.-centric streamer

• A $1.5B “South Park” deal

  • One of the longest-running and most valuable adult animation properties

  • Still culturally relevant and globally recognizable

• Poaching the Duffer Brothers from Netflix

  • “Stranger Things” creators signing a four-year film & TV deal with Paramount

  • Symbolic and practical win in the talent arms race

• A deal with Activision (Microsoft) to create a live-action Call of Duty film

  • Moves deeper into gaming IP, an increasingly important source of global fandom

Taken together, this is not random. It’s a deliberate stack:

• Sports (UFC, Champions League)

• Cultural animation & comedy (South Park)

• Streaming-era mega IP (Duffer Brothers)

• Gaming (Call of Duty)

Now imagine them buying WBD’s library and HBO’s slate. Suddenly, Paramount+ + Max looks like a platform that can:

• Compete for the #2 spot in streaming globally (depending how you treat Amazon Prime)

• Anchor subscriptions around sports, iconic series, and big franchises

This is what “playing for keeps” looks like.

Operationally, Paramount Is Rewiring Itself

Deal appetite is one thing. Operating discipline is another.

Paramount is pursuing a serious turnaround:

• Targeting $3B in total savings, up from previous goals

• Cutting around 1,600 jobs as part of broader restructuring

• Crucially, planning to reinvest $1.5B in:

  • Paramount+ content

  • UFC programming

  • Third-party licensing

  • An expanded film slate

Starting in 2026, they aim to release at least 15 theatrical films per year.

The pattern is clear:

• Remove cost and legacy fat

• Reinvest into IP that can travel across theatrical and streaming

• Use the combination to attract talent and create global franchises

That’s the industrial backbone. The more interesting layer is how they’re lining up capital and politics.

Sovereign Wealth, Trump World, and Deal Math

For a smaller company to credibly go after WBD, it needs more than ambition. It needs capital partners who can go big.

Paramount appears to have found them:

• The bid is reportedly backed by three Middle Eastern sovereign wealth funds:

  • Saudi Arabia

  • UAE

  • Qatar

Yes, Saudi and Qatar in the same structure. That alone tells you how strategic this is.

• These funds would provide tens of billions in equity or hybrid capital.

• That lowers leverage on Paramount’s side and gives regulators a different profile to weigh than a heavily debt-financed Comcast- or Netflix-led transaction.

Politically:

• Saudi, UAE, and Qatar all have a history of significant deals with the Trump administration and every reason to keep that relationship warm.

• Their combined SWF firepower exceeds $3T in assets.

• WBD is a relatively small check in that context, especially if the upside includes influence over a major U.S. media stack and its sports rights.

It’s also part of a broader pattern:

• The $55B take-private of Electronic Arts involves Saudi capital and Jared Kushner.

• The region is pouring money into sports:

  • LIV Golf

  • Saudi boxing initiatives

  • Padel, ATP sponsorships, and more

If the future of media rests on:

1. Content (especially sports and tentpole IP)

2. Firepower (capital and political cover)

3. Distribution (global streaming)

…then sovereign funds that are simultaneously:

• Buying sports

• Backing studios

• Maintaining strong White House ties

are extraordinarily valuable partners.

And yes, everyone involved is loudly insisting media reports about discussions are “materially inaccurate.” Which usually means: close enough to sting.

Legal and Political Positioning

Paramount isn’t only counting on foreign capital and friendly handshakes.

They’ve also:

• Settled a lawsuit with President Trump for $16M.

• Brought in Makan Delrahim, former head of the DOJ’s Antitrust Division under President Trump, as Chief Legal Officer (key on the $8.4B Paramount–Skydance merger).

Combine that with:

• Sovereign backing

• A cleaner balance-sheet structure

• A less politically charged brand than Comcast or Netflix

…and you get a bid designed not just to win on price, but to survive the approvals process.

Is Paramount Inconsistent or Just Very Deliberate?

From the outside, some moves look contradictory:

• Settling with President Trump

• Scaling back certain DEI initiatives

• Shifting CBS News leadership in a way many read as more conservative

• Canceling Stephen Colbert’s show, which fueled “purging liberal voices” commentary

And yet at the same time:

• Re-signing Jon Stewart, a very visible Trump critic, through 2026

• Locking down South Park, which targets pretty much everyone

If you only look at content, it can seem messy. If you look at news, it makes more sense.

Paramount bought The Free Press and installed its founder, Bari Weiss, as editor-in-chief of CBS News, explicitly talking about a desire for more balanced, fact-based coverage.

That matters because:

• Comedy and animation skew to one side culturally.

• News shapes the middle, and the middle is where political ROI is highest.

CBS News has long been seen as center / center-left. If you want to influence broad public opinion without looking overtly partisan, that’s exactly where you go.

Why does South Park’s stance even matter? Its audience already skews left and is unlikely to shift their views because of the show. And with today’s algorithmic feeds, platforms like YouTube and Instagram will never surface this content to people outside that bubble anyway. News media, however, is a different story. That’s where real influence happens. And Bari Weiss is certainly not operating from the political center or center-left.

Any political goodwill here will also benefit Middle East financing, closing the strategic loop.

So instead of reading Paramount as “bipolar,” it may be more accurate to say:

• They’re keeping culturally powerful, sometimes critical voices (Stewart, South Park) – appearance, public hedge, talent appeal.

• They’re repositioning news for political goodwill thereby signaling to the administration: we’re not an oppositional media empire.

No one talks about the Bari Weiss / Free Press deal but in my opinion it’s the key piece to the puzzle.

Three Levers That Will Define the Next Media Heavyweights

Paramount’s moves line up cleanly against three levers that will define who matters in the next decade:

1. Content

• Sports: UFC, Champions League, and potentially more via Middle Eastern sports ties.

• Big IP: Duffer Brothers, South Park, Call of Duty, plus whatever comes from a potential WBD deal. Appealing also to talent.

• The mid-tier, generic stuff will get eaten by YouTube, TikTok, and algorithmic muck. You need top-of-mind franchises.

2. Firepower

• Political:

  • President Trump relationship

  • Bari Weiss and CBS News repositioning

  • A posture that feels less partisan and more “responsible steward”

• Financial:

  • Sovereign wealth capital from Saudi, UAE, Qatar

  • Structures that look less scary to regulators than piling on debt

  • Optionality for future sports and IP deals via those same capital channels

3. Distribution

• A combined Paramount+ and Max stack would be at real global scale. Likely #2 behind Netflix in pure streaming terms.

• That’s enough reach to:

  • Properly monetize sports

  • Build and sustain big franchises

  • Offer talent a compelling mix of theatrical, streaming, and global distribution

Even If Paramount Loses, It’s Already Won Something

Even if Paramount doesn’t close the WBD deal, it has:

• Shown that its serious about IP

• Strengthened its hand with talent

• Focused on financial performance

• Deepened ties to powerful capital pools (aided by political goodwill)

• Moved CBS News into a strategically important position gaining political goodwill

• As such, shown it understands that political capital is not an afterthought

This isn’t a company just trying to survive the streaming wars. It’s one actively trying to shape what the next era looks like.

Meanwhile, the wider board keeps moving: Amazon could become more aggressive, Legendary (backed by Apollo) is eyeing Lionsgate, and there are interesting linkages between Oracle, Ellison, and Paramount via major cloud contracts.

We don’t know how the WBD saga ends. But it’s clear that Paramount is out to win, one way or another.

BR,
Daniel

I hope you all had a great Thanksgiving and are at least semi-rested for the final sprint of the year.

This week we’re diving into one of the most important media moves on the horizon: the fight for Warner Bros. Discovery (WBD). Whoever wins doesn’t just get a studio, they get one of the last great Hollywood libraries, HBO, and a strategic position that can reshape the streaming landscape.

Today, in Part I, we’ll look at the main bidders and why I see Netflix as the runner-up, not the favorite.

In Part II, we’ll talk about Paramount, and why I think they’re playing the smartest game in town (with some borderline tin foil hat theories to sweeten the analysis).

Let’s dive in.

Why WBD Is the Last Great Prize

WBD is messy but unique:

• A top-tier studio

• HBO and its catalog

• DC, Looney Tunes, Friends, plus tentpoles like Game of Thrones and The Sopranos

• A bundle of aging cable assets

• Roughly $30B in debt

It’s complicated, politically sensitive, and expensive. But if you’re trying to matter in global media for the next 20 years, this is one of the few assets left that can move the needle on its own.

No surprise then that three names keep coming up: Paramount, Comcast, and Netflix.

The Suitors

Paramount

• Wants to buy the entire company, not carve it up.

• The Ellison family would become the controlling shareholder post-deal.

• A Paramount–Warner combination would merge two major studios. Scary for Hollywood and regulators, compelling on scale.

• Reported structure: 80/20 cash–stock.

• At $30 a share, WBD would be valued above $70B, on top of the existing debt. It’s a heavy but not impossible lift (especially with Middle East money, see Part II).

Comcast

• Interested in Warner Bros. and HBO, not the cable networks.

• Would require WBD to spin off cable into a new Discovery Global vehicle (they are planning to do so already)

• Strategically, it’s neat: aligns Warner Bros. with NBCU, big sports rights (NFL, NBA, Olympics), and theme parks.

• HBO would transform Peacock’s otherwise modest streaming presence.

On pure industrial logic, Comcast makes sense. On politics, not so much.

Netflix

• Wants the studio and library, not to run HBO Max as-is.

• Also needs WBD to spin off cable first.

• Financially, Netflix is in the strongest position: US$450B market cap, investment-grade debt, and room to issue more.

• Publicly, leadership is playing it cool, privately, they can’t ignore a library like this.

So who’s realistically in and who’s effectively out?

Who’s Out (At Least Likely)

When you get to this scale, boards don’t just ask “How much?” They ask:

• Can this get approved?

• How ugly will the politics be?

• How complex is the structure?

On that basis:

Comcast
Comcast owns NBC and MSNBC, frequent targets in Trump-world. President Trump has openly floated scrutinizing Comcast and NBC over alleged bias, even hinting at using regulatory tools.

Now imagine asking for approval on:

• NBC

• MSNBC

• Universal

• Warner Bros.

• HBO

All under one umbrella. Add standard antitrust concerns (fewer studios, more vertical power) and you have an easy narrative for regulators to kill. I’d be surprised if this is the winning bid. Unless of course Netflix and Comcast bid together figuring out how to overcome the anti trust element which would in turn take away the political firepower? Long shot, so for now I consider them out.

Amazon / MGM
Amazon remains on the edge of the discussion. On paper, there’s synergy. In reality:

• Big Tech is already under antitrust pressure.

• There’s no Ellison-style relationship here.

• Even if President Trump and Bezos are less combative than in the Washington Post days, a giant tech–media consolidation is a lightning rod.

Not impossible, but it’s not the cleanest path. Which leaves Paramount and Netflix as the real contenders in this round.

Netflix’s Temptation

Netflix going after WBD is fascinating because it cuts against the company’s long-standing self-image. For decades, Netflix was:

• The builder, not the buyer

• The disruptor of legacy studios, not their consolidator

• Led by Reed Hastings’ skepticism of big M&A

So why even consider WBD?

1. Talent and Theatrical Credibility

Netflix has a talent problem brewing.

• High-profile creatives like the Duffer Brothers have left or looked elsewhere (hi there Paramount…)

• A major complaint: Netflix’s reluctance to give films proper theatrical windows, even for big-budget projects.

For top-tier filmmakers, skipping theaters isn’t just about money. It feels like a downgrade in status and cultural impact. At the same time, Netflix has pulled back on some of the splashiest big-budget bets in favor of smaller, more modest projects.

Acquiring Warner Bros. would:

• Give Netflix an in-house studio with deep theatrical experience.

• Let them keep standard Netflix originals on their usual path while giving proven Warner franchises the full cinema treatment.

• Send a strong signal to talent: “We take movies seriously.”

Netflix has reportedly promised Warner leadership that it would release movies in theaters and keep TV licensing going. The challenge is doing that without dismantling the economics that made Netflix successful.

2. The Library and Franchises

WBD brings something Netflix has never truly owned:

• A world-class library spanning decades

• DC, Looney Tunes, Friends, plus the HBO pantheon if included

Netflix licenses content. Owning this kind of IP outright is different:

• It stabilizes the catalog.

• It enables deeper franchise planning.

• It makes the platform feel more like a permanent cultural vault, not just a rotating carousel.

• Plus something nice to plug into Netflix Houses!?

That also helps in the talent war. Creators like the idea of building in a universe that sits next to globally recognized franchises.

3. Scale and the Antitrust Nightmare

In very rough terms:

• HBO Max / WBD streaming: 120M subs

• Netflix: 300M subs

Together, that’s an almost unreachable lead (disregarding dual subscribers for a sec). Which is exactly the regulatory problem.

You’d be asking:

• Is this too much power in one company’s hands?

• Is this unfair concentration over global streaming?

• What does this mean for competitors and distributors?

Politicians and rivals would line up to object. Square that with a tightened regulatory climate, and the probability of smooth approval drops fast.

4. Culture Clash

Finally, there’s the integration headache:

• Netflix would double its workforce, inheriting thousands trained in legacy studio habits.

• Netflix’s culture is famously lean, blunt, and performance-driven. Read more here: Sharing Our Latest Culture Memo - About Netflix (as someone admiring no-nonsense performance focus I do have a crush on the company).

• WBD has layers, politics, and history.

Merging those cultures without breaking one, or both, is far from trivial.

Why Netflix Is the Runner-Up

Summing it up:

Pros:

• Huge financial capacity

• Compelling logic around library

• Potentially unbeatable streaming scale

• Talent, talent and, did I mention talent? It would send a signal

Cons:

• Massive antitrust and political headwinds

• Cultural integration challenges

• Identity risk (from builder to acquirer)

• Public concern around one company “swallowing” yet another giant

It’s a bold move. But when you balance risk, politics, and complexity, Netflix feels more like the plausible runner-up than the most likely winner.

Which brings us to Paramount. Smaller on paper, but arguably playing the sharpest game in the room. I’m not joking – analyzing their moves had me head spinning and me developing a company crush on yet another player…

That’s Part II.

Until then, enjoy the speculation.
Daniel