Netflix Navigates Acquisition Battle and Ad-Supported Growth Push

Netflix navigates a bidding war and antitrust review for Warner Bros. Discovery while accelerating its ad-tier growth, aiming to double ad revenue to $3B in 2026.

The streaming landscape is heating up as Netflix finds itself on a dual track: aggressively pursuing a major content acquisition while simultaneously scaling its advertising business. The company's strategic moves are being closely watched by investors as it balances expansion with regulatory scrutiny.

Regulatory Hurdles and Competitive Bidding

A significant complication has emerged in Netflix's pursuit of Warner Bros. Discovery. The U.S. Department of Justice has initiated an antitrust review of the proposed deal, a development made public on February 23, 2026. This regulatory examination presents a critical obstacle that could prolong and complicate the acquisition process.

Adding competitive pressure, Paramount Skydance has submitted a superior bid for the same target, directly challenging Netflix. Market observers note that the ensuing bidding war will test Netflix's capital allocation discipline and strategic resolve, potentially making the acquisition more expensive.

Accelerating the Ad-Supported Model

On a separate front, Netflix is pushing forward with the rapid expansion of its advertising-tier subscription service. The company's advertising revenue, having surpassed $1.5 billion in 2025, is projected to potentially double to $3 billion in 2026.

This aggressive push into advertising is a core component of Netflix's strategy to diversify its revenue streams beyond traditional subscriber fees. To capture a larger share of the market, the company is rolling out new advertising formats and expanding its proprietary advertising technology platform on a global scale. Some analysts project that Netflix could attract nearly 10 percent of worldwide connected-TV advertising spending by 2027.

A Multi-Pronged Strategic Vision

The bid for Warner Bros. Discovery is part of a broader initiative to secure premium content and solidify Netflix's standing in an increasingly crowded market. Furthermore, the company is ramping up investments in cloud gaming, an area Co-CEO Greg Peters labeled a "major priority" for 2026.

This marks a strategic shift for Netflix. After a prolonged period focused on subscriber growth and cost optimization, the company is now entering a new phase where innovation and scaling new business verticals are intended to drive future expansion. Upcoming quarterly results will provide the first indicators of whether this multi-front strategy is gaining traction with consumers and the market.