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Marcus Johnson (00:01):

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(00:26):

Hey gang. It's Friday, December 19th. Suzy, Nate, Paul, and listeners, welcome in to Behind The Numbers, eMarketer video podcast made possible by Viasat Ads. I'm Marcus, and joining me for today's episode, we have three people, two of them New York-based folks, VP of content, head of our retail desk and host of our Reimagined Retail Show, it's the infamous Suzy Davidkhanian.

Suzy Davidkhanian (00:48):

Thank you for having me.

Marcus Johnson (00:50):

Welcome to the show.

Suzy Davidkhanian (00:51):

This is one of my favorite episodes.

Marcus Johnson (00:53):

Okay. There's more. Good. We don't really like this.

Suzy Davidkhanian (00:58):

I'm not good at instructions. Come on. How many years have we known each other?

Marcus Johnson (01:01):

I told you we shouldn't have another one. Stuart insisted on doing the episodes.

Suzy Davidkhanian (01:06):

It's because I have the best predictions.

Marcus Johnson (01:07):

Okay. We also have her with us principal AI analyst, Nate Elliott.

Nate Elliott (01:12):

Tally-ho, Marcus.

Marcus Johnson (01:14):

Oh, good. It's not going to get better. But then up in the greatest state of Maine, VP of content, Paul Verna.

Paul Verna (01:25):

Happy to be here, but wondering how I can become infamous like Suzy.

Suzy Davidkhanian (01:30):

Oh.

Paul Verna (01:31):

What do I need to do?

Marcus Johnson (01:32):

What she's already started doing, which is try to...

Suzy Davidkhanian (01:37):

Follow the rules?

Marcus Johnson (01:39):

Sure.

Suzy Davidkhanian (01:40):

I'm a good rule follower.

Marcus Johnson (01:41):

Okay. No one believes it.

Paul Verna (01:42):

Well, I definitely can't do that. So sorry, I won't be infamous.

Marcus Johnson (01:45):

Good, good. This has already gone off the rails. Today's fact. Let's get to that. So a Boeing 747's wingspan is almost twice as long as the distance traveled by the Wright Brothers' first flight, which is just 12 seconds. Nothing? Okay.

Nate Elliott (01:46):

So that means the wingspan is 24 seconds?

Marcus Johnson (02:17):

It would've taken them 24 seconds. Yeah. A Boeing... That's what you took away from this? A Boeing 747's wing span is 24 seconds is another way to look at this.

Nate Elliott (02:27):

Yeah.

Marcus Johnson (02:28):

And this isn't a shot of the Wright brothers. It's still impressive. Okay, Wilbur, Orville?

Paul Verna (02:33):

And two rights don't make a wrong, so.

Nate Elliott (02:36):

Oh, man.

Suzy Davidkhanian (02:40):

I'm always canvassing for guests on my show, so just remember that.

Marcus Johnson (02:47):

You really want these two on?

Suzy Davidkhanian (02:48):

Well, I kind of thought I did, but now I'm not so sure.

Nate Elliott (02:52):

Suzy, I think he was asking me.

Marcus Johnson (02:56):

So the reason I'm bringing this up and I say it's impressive, is because the farthest that humans have traveled from earth is 250,000 miles, which is 400 kilometers for people overseas, set in 1970 by the crew of Apollo 13. We've not traveled further than 50 years ago. It's like a hundred times around the earth, basically. So the first flight was 12 seconds, a tiny distance, like a hundred meters or whatever. And then now we've traveled 250,000 miles around the earth.

Nate Elliott (03:31):

Have we gotten more efficient since that Apollo launch? Why haven't we gone that far?

Marcus Johnson (03:38):

Maybe we were like, there's nothing out there. Let's just stay home. Maybe it's a microcosm of life. I feel like everyone, we stay home more. We order in. Maybe that's just what NASA decided.

Nate Elliott (03:50):

NASA knew the pandemic was coming 50 years ago and prepared for it.

Marcus Johnson (03:54):

Yeah. Get DoorDash. All right. Anyways.

Suzy Davidkhanian (03:55):

They're also sending stars, so it could be that they're spending their time and energy in different ways. And by stars, I mean-

Marcus Johnson (03:56):

They're sending stars?

Suzy Davidkhanian (04:02):

... Katy Perry, for example, who is all over the news in Canada because she's dating Justin Trudeau.

Marcus Johnson (04:06):

Oh, famous people into space?

Suzy Davidkhanian (04:09):

Yeah.

Marcus Johnson (04:13):

Yeah. Good. Anyway, in today's episode, we make some very specific-

Suzy Davidkhanian (04:16):

Strong start.

Marcus Johnson (04:19):

Highly unlikely. It was awful. If you're still listening, thank you. God knows how you made it this far. We'll make some very specific, but highly unlikely predictions for 2026, Shark Tank style. Okay. Here's how this episode works for the one listener still tuned in. Suzy's first. She gets 60 seconds to pitch a very specific, but highly unlikely prediction that she thinks will come true in 2026. It's highly unlikely because it's so specific. Then me, Nate, Paul, and everyone listening will decide, we become the panel. We decide if we're going to invest in or believe in this prediction. So we are the sharks, and then Nate goes next and so on and so forth. Let's do it. Suzy, what do you have for us?

Suzy Davidkhanian (05:09):

I am so excited about my prediction, and like every time I come up with one, it is so specific and maybe improbable, but still worth a shot. So everyone-

Marcus Johnson (05:22):

Remember when I just said... Remember when I said just say the prediction?

Suzy Davidkhanian (05:26):

I can't. It's very hard.

Marcus Johnson (05:28):

Is it?

Suzy Davidkhanian (05:28):

It's very, very hard. Yes.

Marcus Johnson (05:30):

All right.

Suzy Davidkhanian (05:30):

Okay. So here's my prediction. Ready? Everyone, especially the street, is expecting that Amazon will increase the cost of Prime, but I actually think that they'll make a small token reduction instead. It won't be a dramatic cut, but I do think that they will make a slightly smaller adjustment down so that the consumers can feel heard, they will feel like they're combating churn and they will be able to reinforce this idea of their program having so much value, because don't forget, Amazon Prime is a flywheel mechanism. It's so much more than free shipping and streaming movies, but they can't afford to lose people and everyone is cord-cutting right now in lots of different sort of membership recurring revenue ways. So I think they're going to go against the grain and they're going to cut, again, a token small amount. And there are three pillars to my theory, which I don't think 60 seconds allows for them, but the consumer is fragile. So that's one. There's this whole idea around cost-cutting.

(06:34):

Two, Amazon has a flywheel that relies on Amazon Prime, and it needs to make sure that that's working. However, Amazon Prime membership, it's not even at a standstill. It's going down this year to last year in the data we have. So it was 54% of US adults 18 to 65 pay for Amazon Prime in June 2025, and that's down. It was 62% in 2022 and 68 in 2023. So it's gone up and then it's come back down again. So they need to combat that. And Walmart Plus is growing. It's the only one of the subscription services that's growing, and it's only at just under $100 annually versus the Amazon Prime, which is 139. And the third leg of this sort of prediction and the meat of it is Amazon has invested so much money in automation that their e-commerce business now is margin-positive. And so I think that they can do this little token move and absorb it and not really kill their margin.

Marcus Johnson (07:35):

So 139 currently. That was changed back in April 2022, so it's been the same price for a while. It started, February 2005 is when this came out. It started at 79 bucks a year and was that for basically a decade. Then they bumped it up from 80 to 100. It was there for a few couple of years. And then over the pandemic, it went from 100 to 120, and then 2022, from 120 to 140. So you think it's going to go down close to Walmart Plus's 100?

Suzy Davidkhanian (08:10):

So I think they won't go down to the $98. There's something very strategic about $98, but Amazon Prime is so much more. So it's kind of, I don't want to call it smoke and mirrors, but it's around perception and making sure that people understand that there's value in what they're delivering, which is way more than the $139 annually when you take all the different services together. But like many other subscription, whether it's CTV or otherwise, there is this idea around you have to go in low to get market penetration and then you can start charging more. I was going to use a loaded word, gouging people. And even in Amazon Prime's world, it's not gouging. I mean, they are literally giving more away than the 139 annual fee.

(08:53):

But I think the world is so fragile right now when it comes to the consumer wallet and their mindset that even, and I'm not saying a big break, I'm just saying like a couple of dollars, and maybe they'll do a tiered pricing. People are already upset about having to pay for a little bit extra if they don't want to have Amazon Prime with ads. You have to pay a little bit more if you want to have Whole Foods delivery. So they're going to figure out a way to have like a more basic sort of annual fee that will feel like, "I've heard you. I know you're under price pressures. We don't want you to leave us." And I think the risk of not doing something, even though admittedly they haven't been raising their prices, that's not different than a Netflix or any other sort of streaming service where they all start low and undercut the market, try and showcase their value so that they can then increase prices as often as they need to.

Marcus Johnson (09:46):

Paul, Nate, what do you think?

Paul Verna (09:48):

Well, I'm intrigued by the counter-intuitiveness of the idea. And I will say, Apple just eliminated the upcharge for the MLS package. So now if you're an Apple TV subscriber, you get access to MLS, which previously had cost like 80 bucks a year to watch, Marcus, I know you'll appreciate this, World Cup winner Lionel Messi and others. So there's like maybe a little bit of foreshadowing of streaming services realizing that they've gone off the deep end with nothing but price increases. But on the other hand, it's just the law of physics, and I don't see it in Jeff Bezos's DNA to do any kind of price cut. I mean, on the next space flight, not only does he have to go farther than whatever distance it was to the moon, but he's going to have to take Justin Trudeau and Katy Perry with him. So that's going to cost a lot more. So I don't know.

Suzy Davidkhanian (10:53):

Paul, you know what? Me too. I thought a little bit about that, and would Bezos be interested in sort of cutting a break. And the truth is that I think not giving people a break is not going to work for them. Churn is worse. Retention is what the unlock is for Amazon Prime right now, and they can't afford to lose more people.

Paul Verna (11:13):

Yeah.

Marcus Johnson (11:13):

I mean, that makes sense to me. It feels like they've got to do something, especially if they want to add households. So we've been tracking Amazon Prime households. What's some numbers here? In 2016, it was about a third of American households. 2019, about half. This year, 2025, it was about three quarters to 75%, but go out four years and we think it's going to go from 75% of American households having Prime to 77%. So it's basically flat. And maybe that goes down if the price pressure starts to catch up with folks. So I could see it, as I said, giving Prime a second win. Absolutely. Nate, what do you think?

Nate Elliott (11:53):

I could see Amazon potentially cutting people a break on the Prime subscription, but I have to imagine they would also reduce what they offer as part of that package. I mean, Mark, as you talked about the amount of money having gone up over the last 10 or 15 years since they launched Prime, but they have taken away services as well. I mean, adding a delivery charge to Whole Foods deliveries, putting in ads unless you want to pay more, all of this is a further reduction in value beyond just the price going up. And Suzy, you make the point that people get a lot more value than $139, but that's only if you want all the stuff that's in that package. And most people don't want most of that stuff. They want the delivery and they want the movies and TV shows, and people aren't using Amazon Music. People aren't using the other stuff that they claim as value as part of that package.

(12:44):

So it's easy to reduce the price or give something away for free when you're including things that people don't really want. Let's be honest. That's why Apple was able to give away MLS Plus as part of their package now. I love soccer. I've been a season ticket holder for two different Major League Soccer clubs in my life, but I also know that 80 bucks a year for MLS content was always going to be a hard sell. And likewise, if Amazon wants to drop that price, they're going to have to pull out some of the things that they claim is value that maybe people aren't really using. And yeah, I could see it going down five bucks or 10 bucks potentially, but I think people would lose more value than the five or 10 bucks that goes down.

Suzy Davidkhanian (13:31):

Well, and I agree, perception is reality, right? And they are definitely offering more things, but there are three main things people are using and it's really about savings, convenience, and entertainment, basically Amazon Prime. But I was talking about a token, and I think it wouldn't even be, on a monthly basis, it might not even be calculated. It might just be if you do the annual, because now they've locked you in, you got $5. I'm really talking about token.

Nate Elliott (13:57):

Yeah. I mean, if they do that, I don't... I mean, I see them running ads on every Amazon delivery truck in America about how the price of Prime has gone down. But I also think that people are smart enough to know that if it's gone down 12 cents, then that's not actually helping.

Marcus Johnson (14:13):

Yeah. I wonder if they add something, and that's the extra value that they're giving folks. They're saying, "We know things are tough, and we're going to add this for free into the package for the same price."

Nate Elliott (14:25):

And Suzy would know this better than me, but haven't they kind of thrown every single thing they have into Prime except for ad-free and Whole Foods delivery?

Marcus Johnson (14:25):

What's missing, yeah.

Suzy Davidkhanian (14:33):

Well, and I think the idea is more like people are feeling so much pressure and now there are all these apps that help you understand all the recurring payments. So if you add something for free, again, it goes back to that perceived value. It's not quite the same as the dollar in your pocket. And so I know it's only 12 cents. I didn't do the math, but let's go with 12 cents a day. Not a really big deal, but I think given the price of so many things going up, it's a feel good moment more than anything else.

Paul Verna (15:03):

One thing I could see them doing because they're already starting to do it is... So sometimes if you order something on Amazon and you bundle it or you don't do the fastest shipping, they will give you a credit toward like a movie rental. So maybe they would do something like that, because that's actually something that's not rolled into Prime. Yes, Prime gives you access to Amazon Prime, but if you're watching a movie, almost always there's like a rental fee for the movie. So maybe they give you like two credit rentals during the course of a year, two rental credits for the course of years, or something where they're kind of throwing you a bone.

Marcus Johnson (15:39):

Yeah. I'm half in.

Paul Verna (15:42):

Same.

Marcus Johnson (15:43):

Half. All right. Nate, full point or half a point?

Nate Elliott (15:46):

I didn't know we could do half points.

Marcus Johnson (15:47):

Suzy invented it, unfortunately.

Suzy Davidkhanian (15:49):

I invented it. Yep.

Nate Elliott (15:50):

Okay.

Paul Verna (15:50):

Technically we can't, but Suzy is so infamous that she gets to make up the rules [inaudible 00:15:55].

Suzy Davidkhanian (15:55):

That's right. But you can also give a point and a half.

Nate Elliott (15:58):

Can I do like 0.63 of a point?

Suzy Davidkhanian (15:58):

You can do a point and a half.

Marcus Johnson (16:00):

That's fine. You don't have to do a point and a half. What was that, Nate? Sorry. How much?

Nate Elliott (16:03):

Can I do 0.63 of a point?

Marcus Johnson (16:05):

No.

Nate Elliott (16:06):

Okay. I'll do half a point.

Marcus Johnson (16:08):

All right. One and a half for Suzy for her Amazon will reduce its Prime membership cost in 2026 prediction. We move on. Nate, what do you got for us?

Nate Elliott (16:18):

All right. I think that by this time next year, OpenAI will have tried and failed to buy Apple.

Marcus Johnson (16:18):

Okay.

Nate Elliott (16:23):

And I think you guys are probably thinking of two objections right now. One is, why would they try to buy Apple when they should try to buy Microsoft? After all, they've been working with Microsoft for almost a decade. Microsoft owns 27% of their stock and they owe Microsoft almost $300 billion in Azure license fees over the next few years. But the reality is, Microsoft doesn't have the stuff that OpenAI covets. When OpenAI declared this code red in the wake of Gemini 3, it wasn't just that Gemini 3 was perhaps a better model than ChatGPT 5.1. It was also that usage was growing. And the reason usage was growing was because Google had access to both distribution and integrations that OpenAI doesn't have access to. And Apple could offer that distribution and those integrations more readily than Microsoft could. You can't get the number one mobile OS in the world, because Google already has that, but Apple has the number two mobile OS in the world and number one in the US.

(17:22):

You can't get the number one browser in the world. Google's got that, but Apple has the number two browser in the world. They have incredibly large number of users on their email services, on their cloud services. And perhaps most importantly, they have both design and device manufacturing expertise and they have cool and street credibility that Microsoft can't offer and OpenAI would want to go for. I think your second objection is, how can they buy a company that's worth three or four times as much as they are? But if you look at the increase in the valuations on OpenAI's investments over the last couple of years, they're doubling in value about every six months. Every six months, their investors say, "You're now worth twice what you were."

(18:03):

At this point in time, based on that math, they're worth about three quarters of a trillion dollars. And by this time next year, they'll be worth more than $3 trillion if they follow that same trajectory, which is about the same size as Apple, a little bit less, about the same size as Microsoft too, also a little bit less. So either on their own or with a partner like Nvidia, I could see them making a play for Apple. And if there's one thing we know about Altman, it's that his ego is limitless and his appetite for growth and importance is also limitless and I think they'll make a play.

Marcus Johnson (18:40):

I like this because they've shown efforts to do something in the hardware space before they bought former Apple design lead Jony Ive's AI device startup IO back in May of this year, 2025, for about $67 billion, and now Mr. Ive is the head of design for both companies. So they've shown interest in figuring out the hardware piece. Suzy, Paul, what do you think?

Suzy Davidkhanian (19:10):

So you kind of addressed it, but I'm not convinced about the dollar valuation. I've been seeing OpenAI at 500 billion. And while I understand that they're growing and you're saying twofold in shorts amounts of time, I think there comes a point where like if you think about Apple or Google or any of the ones that have passed the trillion-dollar mark, it's incremental. That growth is so little by little, the bigger you are, the harder it is to grow so fast. So I don't see that OpenAI will grow that fast in a year ever, but in a year for sure. So it's just around how they would purchase it that makes it a little bit harder for me to grasp.

Nate Elliott (19:48):

Yeah. So that 500 billion number was more than three months ago now, and they took investment in September. In March of this year, they were worth 300 billion. In October of last year, it was 157 billion, and in February of that same year, it was 80 billion. So they are doubling about every five or six or seven months. Those were all about five or six or seven months apart, those rounds of investments. And the investors have been happy to keep that number growing. NVIDIA is their biggest investor, and also OpenAI is one of NVIDIA's biggest customers. It's in their mutual interest to keep those numbers going up and up and up. And I think the investors will be pretty happy with the idea that we can keep doubling this at least a couple more times. But you're right. I mean, they would need some help whether it's from a bank to do a leveraged buyout or from a partner like Nvidia to make up the difference and have more money than Apple's worth. But again, Sam Altman's appetite is very often bigger than his stomach.

Paul Verna (20:48):

I mean, I agree with the... The part that I think there's no dispute about is that they will fail. As to whether they actually make a bid, I kind of have mixed feelings about it. On the one hand, if that valuation trajectory goes where you're saying it can go, Nate, then yes, I think OpenAI would be in a financial position to actually make a serious bid, but getting to that valuation assumes that there's no kind of like market correction, AI bubble, whatever you want to call it, some kind of pullback. And I think there's already a sense that I think some of those valuations are based on vapor. I mean, we're kind of reliving the dotcom crash.

Nate Elliott (21:37):

Paul, come on. Don't give up the ghost.

Paul Verna (21:41):

But the part that we haven't talked about yet, but I think is really important, is that back to, Suzy, your point about perception being reality, Apple is perceived as having fumbled AI, basically. I don't know that I necessarily agree with that, but in terms of rallying investors around a potential buyout of Apple, I think one of the cases that OpenAI can make is that this puts together two companies with core competencies that together will be a formidable force, but separately, neither has quite achieved what they can do as a duo.

Marcus Johnson (22:20):

Yeah. So let me throw this out at you guys, because Paul, this is something that you were saying. I don't know if you were half serious or 5% serious, 90%, but when Nate pitched his prediction that OpenAI will try but fail to buy Apple, you said, or maybe yours will be Apple will try to buy OpenAI and fail as well. Any thoughts on that, anyone, in terms of like, could the reverse happen?

Paul Verna (22:45):

It could for the reason I just mentioned about Apple trying to shore up its AI credentials, so nothing's out of the realm of possibilities. And again, if the market starts to turn to where OpenAI doesn't suddenly look like an entity that's going to be able to continue to grow its valuation by huge multiples every quarter, then maybe it does make sense for Apple to swoop in and basically make a bid for them. So yeah, I mean, I was kind of riffing off of Nate's prediction and I wasn't going to make it my own prediction, but it was my natural response to what if.

Suzy Davidkhanian (23:29):

I do think that there is some sort of positive momentum that it's a private company, right? So that the deal can happen in sort of like that shroud of un-transparency transparency that could help the two come together. And I think the biggest fact that Nate talked about, which we have not talked about yet, is how Google is so much bigger and better than Apple. And so, and there is that rivalry, as we all know. So this could potentially be wind in both companies' sails, right? And the fact that one is gigantic and public might be sort of the Achilles heel in the process, but I do think that it could happen. I just don't know that it would happen so quickly. I don't think they can ramp up that much money so fast, like you were saying, on their own.

Paul Verna (24:20):

Yeah. And Nate, as you were talking and comparing Apple to Google, I'm thinking, well, if Sam Altman's ego has no bounds, then why wouldn't he just make a play for Google? Right?

Nate Elliott (24:31):

That's fair. I think it is actually too big at any point in time, but no, it's a fair point. And Marcus, your point about Apple maybe trying to buy OpenAI would make more financial sense that Apple is much bigger right now, has more revenues, actually has profits a lot of the time, and is already public. I think it's challenging both because of Altman's ego, but also because remember, Microsoft owns 27% of OpenAI. There's only 73% left in terms of what's available in shares in that company for Apple to try to pick up, because I don't think Microsoft have any interest in selling OpenAI to Apple.

Paul Verna (25:11):

Right. That idea though brought me back to like the Mac versus Windows battles of the '90s and 2000s. Suddenly, Apple and Microsoft going at it again.

Nate Elliott (25:24):

Yeah.

Suzy Davidkhanian (25:25):

Well, I'm glad I'm on the right side of that equation as the only IBM computer on the pod.

Marcus Johnson (25:30):

Ah, don't remind us.

Suzy Davidkhanian (25:32):

And the only Galaxy phone. Just saying.

Marcus Johnson (25:37):

We have you on in spite of it. John, you know how happy John would be, the whole production team, if we never had you on again, Suzy, because of your computer choices?

Suzy Davidkhanian (25:37):

Oh my God.

Marcus Johnson (25:47):

No offense to IBM, but it makes production a little bit more tricky. That's all I'm saying.

Suzy Davidkhanian (25:49):

That's why you make me come to the office to record.

Marcus Johnson (25:51):

Basically, so we could circumvent the disaster. I'm half in. Nate?

Nate Elliott (25:59):

If I get a vote, then I give myself a full point. Yeah.

Marcus Johnson (26:01):

No, what am I talking about? Sorry, Suzy.

Suzy Davidkhanian (26:03):

Me too. Half.

Paul Verna (26:06):

Half.

Marcus Johnson (26:07):

Everyone's half in. Okay.

Nate Elliott (26:10):

This is going to be a three-way tie today, isn't it?

Marcus Johnson (26:12):

Probably, yeah.

Suzy Davidkhanian (26:13):

We love ties.

Paul Verna (26:13):

It's up to you guys if it's a three-way tie.

Nate Elliott (26:13):

I think it might be up to you.

Paul Verna (26:13):

One of you play spoiler.

Suzy Davidkhanian (26:20):

Might be a two-way tie.

Marcus Johnson (26:20):

We'll see. If we do have a tie, then I'll obviously make the right decision.

Suzy Davidkhanian (26:20):

Then I lose.

Marcus Johnson (26:26):

Or maybe we can get Stuart who runs the team to weigh in on what he thinks. But IBM, just really quickly, I love your machines. I'm just saying, everyone else has a different type of machine, and so it makes it tricky, Suzy.

Suzy Davidkhanian (26:36):

No comment.

Marcus Johnson (26:37):

All right. Paul, you're up.

Paul Verna (26:38):

All right. My prediction is that the Warner Brothers Discovery acquisition won't be settled in 2026. And my rationale for that is that there are forces at play that are just going to drag it out, right? So if Netflix were the only party bidding for this company, the regulatory scrutiny was already going to be intense on its own merits and then further complicated by the fact that the administration has inserted itself in the process. So it means that Netflix would have already faced long odds of getting a thumbs up from the FTC after many months of review. But when you throw Paramount into the mix and the fact that it's a hostile bid, things get even more complicated. So now you have a party that's clearly favored by the administration, but not necessarily by the Warner board and certainly not by Netflix. And it's worth noting that hostile bids don't have a great track record of succeeding.

(27:31):

So the fact that you have these two parties now in the running really opens the possibility for a lot of litigation before the deal even gets approved by the boards and goes before regulators. And it also is possible now with basically being like a spitting contest between two companies that other bidders are going to smell blood in the water and get into the fight themselves, which again, would just prolong the process. So I think the how it ends could be the subject of a different predictions episode, but when it ends, I think is not going to be-

Nate Elliott (28:09):

Next year's?

Paul Verna (28:09):

Yeah. Maybe early next year, whenever we do the next one, I'd be ready to stick my neck out and say how it's going to end, but as far as when it's going to end, I think we're still going to be talking about this as we bring in 2027.

Marcus Johnson (28:23):

Yeah. They've got a lot to sort out. The deal, it has to close after Warner Brothers Discovery completes this planned separation of the streaming and the studio business from its TV networks. That was planned for Q3 2026. And they did, to be fair to them, sorry, Warner Discovery and Netflix did say they're expecting the deal to close in the next 12 to 18 months. So Paul, you're saying it's likely to be towards the tail end of that range?

Paul Verna (28:48):

Yeah.

Marcus Johnson (28:52):

Okay. I don't know. Suzy, what do you think?

Suzy Davidkhanian (28:55):

So I feel like it's not going to go through and I think it'll get-

Marcus Johnson (28:59):

Next year or at all?

Suzy Davidkhanian (29:01):

At all. And I think in the way it's being presented now, because I think that, and we've talked about this before, like when you have a company and you split it into multiple sort of splinters and then what happens to those little guys and nobody wants to buy them. So the big company's like, "Wait a second, I don't know what I'm going to do with this little thing." And CNN is like that little big thing and nobody knows what to do with CNN. And so I just don't know if the board is okay with the way Netflix is thinking about it. And then you add the complications around what you are saying, Paul, with the government getting involved and the spitting match and the, I don't know that expression, but the spitting match is how I'm calling it, then it becomes just so complicated that I think they'll just pull out.

Nate Elliott (29:43):

Sorry, I'm just picturing that.

Suzy Davidkhanian (29:45):

All of that, right? Not good choice of words perhaps. I'm just-

Marcus Johnson (29:51):

It's her third language, people. Step off.

Suzy Davidkhanian (29:52):

... replicating. Oh my God, did you just say something nice?

Marcus Johnson (29:58):

I've got you. I got you, Suzy.

Suzy Davidkhanian (29:59):

Thank you.

Nate Elliott (30:01):

So I think you're all forgetting that Netflix could just make Bari Weiss the editor in chief of the whole thing and it would go through tomorrow. At least, it would get government approval tomorrow. Yeah. I mean, Paul, I think you're 100% right. I'm not sure how to vote on it though because it doesn't seem like a highly unlikely-

Marcus Johnson (30:21):

You want to win.

Nate Elliott (30:22):

It seems-

Marcus Johnson (30:23):

Sorry.

Nate Elliott (30:23):

It seems pretty specific, but also even if there weren't competitive bids, it seems likely this might not have closed in 2026. I think the competition and the government intervention just basically guarantee that that likelihood will play out. But yeah, I mean, I have no notes on what you said on the prediction. I agree wholeheartedly that this is going to play out over a very long period of time.

Paul Verna (30:49):

I always conveniently overlook the not the highly unlikely part, and I just basically make a prediction that I think-

Suzy Davidkhanian (30:58):

That he believes will happen.

Paul Verna (30:58):

... it's going to happen. Yeah.

Suzy Davidkhanian (31:00):

Literally, meanwhile, one of the predictions I did was that Amazon was going to buy Kia. But I have really good reasoning for it. Let's be honest. My-

Marcus Johnson (31:11):

That's true. You did. It got-

Suzy Davidkhanian (31:11):

Or Roblox is going to buy AMC.

Marcus Johnson (31:12):

[inaudible 00:31:12].

Suzy Davidkhanian (31:12):

I go all out on these, Nate.

Marcus Johnson (31:12):

You do.

Suzy Davidkhanian (31:14):

So I understand where you're coming from.

Paul Verna (31:16):

Yep. That's why you're infamous, Suzy.

Marcus Johnson (31:20):

Paul, real quick, I mean, we've not had a chance because we've ran out of episodes for the year to really talk about this deal. Separate to if the deal goes through or not, I mean, what's your take on the deal in terms of the winners and losers and how much of an impact this could have?

Paul Verna (31:38):

I don't think Netflix ends up buying Warner Brothers Discovery. So now I'm teasing my next prediction, but I don't know if it's going to be Paramount either. So I think we're going to be in a situation where it's going to be really messy. All of the media companies that own legacy traditional TV networks are trying to spin them off and will continue to spin them off. That's like a whole separate thing. But the streaming universe, one of the things that Netflix has been advancing as an argument is that it doesn't compete just in premium streaming. It competes with YouTube and TikTok. I think there's some truth to that. I think there's also... I also see the counter argument. So I think whatever happens with these two, we're still going to be in a world where there's going to be a ton of fragmentation.

(32:36):

There's not going to be a clear leader because it's not going to be easy to compare apples to apples across all of these companies. So in other words, I don't see a world in which Netflix becomes a monopolistic entity in premium video streaming because it has added HBO to its portfolio. Obviously it's going to be bigger, more subscribers, but you're still going to have Disney, you're still going to have Amazon and Apple, and you're still going to have YouTube, which I think is a competitor on some level. You're still going to have TikTok. You're going to have Meta. You're going to have other companies that are trying to vie for the connected TV audience. So yeah, so I think it's going to be complicated.

Marcus Johnson (33:25):

I mean, YouTube's number one in terms of listening time across all these platforms going to Nielsen. So yeah, absolutely a competitor.

Paul Verna (33:32):

Viewing time. Yeah.

Suzy Davidkhanian (33:33):

Also, it feels like there's probably a lot of overlap between HBO subscribers and Netflix.

Paul Verna (33:38):

Yeah. Yeah, there's some for sure.

Marcus Johnson (33:41):

Yeah. What do we think, Nate?

Nate Elliott (33:45):

Well, Marcus, how do I vote on something that is definitely going to happen and not unlikely at all?

Marcus Johnson (33:51):

Unfortunately, you have to say yes.

Suzy Davidkhanian (33:56):

Welcome, Nate. I hope you get to come to all the episodes.

Nate Elliott (34:00):

This is how Paul gets a three?

Marcus Johnson (34:02):

Yeah, pretty much.

Nate Elliott (34:03):

All right. Paul, you got a point. Congratulations.

Marcus Johnson (34:05):

Nate is said. All right. Suzy just needs a point to win.

Suzy Davidkhanian (34:09):

I mean, is the prediction that it's never going to happen, or it's going to happen, it's just not going to happen this in 2026?

Paul Verna (34:14):

It's not going to happen in 2026.

Suzy Davidkhanian (34:17):

Oh, so I think I'm half, because I actually don't think it's going to ever happen. And I think they'll get the answer to that faster than... I think they're going to get the answer to that it's not going to happen in '26. I don't think it's going to drag out to '27 to hear that they can't buy it.

Marcus Johnson (34:32):

Okay. All right. So if I give nothing, it's a three-way tie, but I won't, of course, because Paul's never wrong. Paul, you get full point from me. I think you're spot... Actually, you know what? I'll go half a point. I'll go half a point, because I could see them really aggressively trying to make this happen and maybe some things change to get them under the wire December 27th of 2026. But I'll go half a point, which still means you win. Congratulations to Paul.

Nate Elliott (34:57):

I mean, if I'd given him half a point, it'd be a three-way tie, but everyone has overlooked the fact that-

Marcus Johnson (35:00):

Yeah. That's why I let you guys go first.

Nate Elliott (35:01):

You overlook the fact that Paul's my boss.

Paul Verna (35:04):

I was just going to say, don't let that play into your decision.

Suzy Davidkhanian (35:08):

No, it's okay.

Nate Elliott (35:09):

Too late.

Paul Verna (35:09):

Unless you want to get a raise next year.

Nate Elliott (35:11):

That's right. Raise and promotion.

Marcus Johnson (35:13):

Remember when you didn't give me a point?

Nate Elliott (35:15):

Yeah.

Marcus Johnson (35:15):

These are fantastic predictions regardless. Amazon will reduce its Prime membership cost in 2026, point and a half out of three. OpenAI will try, but fail, to buy Apple, maybe the reverse happens. Point and a half from Nate. And then Warner Brother Discovery acquisition by Netflix won't be settled before the end of 2026. That gets a full two. Congratulations to Paul.

Paul Verna (35:35):

Thank you, investors.

Marcus Johnson (35:37):

That's all we got-

Nate Elliott (35:37):

Sharks.

Marcus Johnson (35:38):

... for today's episode. Thank you so much to all of my guests. Thank you first to Suzy.

Suzy Davidkhanian (35:43):

Thanks for having me.

Marcus Johnson (35:44):

And to Nate.

Nate Elliott (35:45):

Thank you.

Marcus Johnson (35:47):

And today's winner, Paul.

Paul Verna (35:48):

Thank you, and Happy New Year, everybody.

Marcus Johnson (35:50):

Yes, indeed. And a huge thank you to the whole production crew. Good to everyone for listening in to Behind the Numbers, an eMarketer Video podcast made possible by Viasat Ads. Tune in Monday for our last Behind the Numbers episode of the year. Happiest of weekends.