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Value vs. Value Delivery: What the $82.7 Billion Netflix Deal Teaches Us About Innovation
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In this solo episode of The Voice of Growth, host Manny Teran dives deep into Netflix’s monumental $82.7 billion bid to acquire Warner Bros., HBO, and HBO Max — and what it reveals about how great companies evolve. Manny explores the timeless distinction between value and value delivery, a concept rooted in his work with Adam Hartung at Spark Partners. Through the Netflix story — from DVDs by mail to streaming, to original studios, and now legacy content ownership — he shows how businesses that understand their core value adapt seamlessly while others defend and decline. Along the way, he connects this global headline to everyday entrepreneurship: how fear, bias, and stagnation kill innovation, and how small business leaders can build resilience by staying in front of trends, stacking capabilities, and experimenting without fear of failure. This episode is a masterclass in mastering the mind and the market — reminding leaders that innovation isn’t technology; it’s creating what people want to buy, again and again.
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Transcript
Introduction to Voice of Growth Podcast
00:00:04
Speaker
The Voice of Growth, Mastering the Mind and Market. Welcome back to the Voice of Growth podcast, Mastering the Mind and Market. My name is Manny Turan, and I'm your host.
Netflix's Bold Move: Bidding for Warner Brothers
00:00:19
Speaker
$82.7 billion. dollars That's the amount that Netflix has put forth in a bid to acquire Warner Brothers Studios.
00:00:29
Speaker
TV and film, as well as HBO and HBO Max. This deal, if it's able to cross all the regulatory antitrust sort of things, can reshape the way that Hollywood creates movies, distributes movies, and ultimately how value is delivered in the entertainment industry.
00:00:52
Speaker
Now that phrase has a special meaning, value delivery.
Understanding Netflix's Core Value Proposition
00:00:56
Speaker
And the fact that Netflix is an organization that understands that it's always been delivering entertainment.
00:01:06
Speaker
So when I worked alongside Adam Hartung at Spark Partners, we talked a lot about trends. We talked a lot about value and value delivery. And there is a significant difference between the two.
00:01:18
Speaker
Let me explain why this is important. If I go and I buy something, the value that's exchanged there is at a lower level, at a different level than what you may think.
00:01:32
Speaker
If I'm buying food from Whole Foods, I go in there, I spend $120 on some steaks and wine, some vegetables, a gallon of milk and some eggs.
00:01:43
Speaker
Okay. You would suspect that the value, that's the value of what I'm buying. I'm spending spending the money, I'm getting this and that's the value. But in fact, the value is even beyond that.
00:01:55
Speaker
So the value for me is healthy foods so I can eat with my family, so I can um operate at an optimal level so that I can enjoy my eveningve evening. I love cooking so I can also enjoy the time. So all those things are bundled as the true value of that merchandise.
00:02:17
Speaker
The value delivery is the store, is the eggs, is the milk, and is the whole value chain beyond that. So how they actually get the steak from the farm to my table, all of that is bundled under the value delivery.
00:02:36
Speaker
The reason why Netflix is interesting in this conversation is because Adam and I used to use that as an organ is as an example of an organization that truly understands their value.
Netflix's Journey: DVDs to Streaming
00:02:52
Speaker
So Netflix's value is that they deliver entertainment. They started off, of course, delivering DVDs by mail. Then many, many years later, they divested some of their warehouses so they can take some of that cash and they invested in this new thing called streaming.
00:03:14
Speaker
Then after many, many years, they then created their own studio so they can have original content and essentially became the number one biggest world studio in the world.
00:03:28
Speaker
All along that timeframe, their value remained the same. The value delivery is the only thing that changed. Value, they deliver entertainment.
00:03:43
Speaker
Value delivery, DVDs by mail. Right here, and the second one, value, they deliver entertainment. Value delivery, streaming.
00:03:56
Speaker
The third one, here we go again, value, we deliver entertainment. Value delivery, content from their own studios.
Hollywood's Potential Redefinition and Concerns
00:04:05
Speaker
This next chapter in the Netflix saga, if it goes through, can really redefine the way that a Hollywood produces movies and and distributes movies.
00:04:19
Speaker
That whole entertainment world will essentially shift. Now, Netflix has said that they do not want to cease taking things to the theater.
00:04:31
Speaker
But just imagine this. Imagine some of their original series going to the theater. Imagine that they now have access to the entire tool chain from not just the...
00:04:47
Speaker
content of their own library, but now they have this 100-year-old content from Warner Brothers. They have Game of Thrones, they have Casablanca, they have all these franchises that they can add additional spinoffs, they can add prequels and sequels. I mean, the the the creativity that is there to me is exciting.
00:05:11
Speaker
Not everybody's the same way excited, however. The Screen Actors Guild, other folks in the industry are raising flags that it could cause a lot of issues with respect to human resources.
00:05:25
Speaker
If you think about the fact that Netflix has its its own studios, actors, equipment, and so forth, So does Warner Brothers. And so if you combine them, you'll need less of the equipment of the ah production staff. You'll need less of the actors. So there's some red flags that are legitimate here that are being raised with respect to this potential acquisition.
00:05:51
Speaker
The other thing, of course, is that there is a tremendous amount of antitrust and regulatory hurdles that need to be addressed as well.
Antitrust Issues and Competition Concerns
00:06:01
Speaker
Larry Ellison, who is one of the top shareholders of Paramount, we also wanted to buy ah Warner Brothers.
00:06:09
Speaker
So there could be some issues there because Larry Ellison, of course, is close to the Trump family. And so there could be some issues there and certainly something to watch.
00:06:20
Speaker
When Fox was being acquired years ago, there was an issue that there was some lawsuits that lasted two years. So who knows what's going to happen with all this.
00:06:31
Speaker
I made some notes here that might be interesting to share with respect to this potential acquisition.
Owning the Value Chain through Innovation
00:06:39
Speaker
So first of all, this deal shows how value isn't just about performance or growth.
00:06:45
Speaker
It's really about owning the value chain and it's about understanding your evolving DNA. Innovation. What does that word mean? Well, to us, it means that you create things or services that people want to buy.
00:07:05
Speaker
And this is the simplest definition. So you're creating new things and so that people wanna buy. That's fundamentally what it is. So people think innovation is technology, not necessarily.
00:07:17
Speaker
You're just creating things that people wanna buy. That's a very fundamental form. And so if thing if people stop wanting to buy like the DVDs, then you need to innovate and create the streaming model.
00:07:31
Speaker
And if everybody else is streaming, then you need to figure out how to adapt add additional value and keep that ball moving forward. This new piece of adding on Warner Brothers could keep that momentum going.
00:07:46
Speaker
Now, there was another thing that Netflix was doing, which was entering into the gaming market, and and that was going to be their next big chapter. Frankly, it hasn't gone as well as the others, but then again, these are things that organizations try out, they they study them, they assess them, and if they don't work out, they can push them aside.
00:08:09
Speaker
All these large organizations are doing things under the flag of innovation.
Innovations and Their Shortcomings
00:08:17
Speaker
Amazon had a store that you walked into the store.
00:08:21
Speaker
The store read your phone number that was ah linked up to whatever. You take whatever you want and you walk out the door without paying. So everything had RFID tags. It was supposed to be something that would be ideal for, um or places like big cities where people would just want to come in and get something and go.
00:08:40
Speaker
What happened is it didn't work out. And they did their homework, they got some data and and they ended closing those stores. Nothing wrong with that. And the reason I mention that is you as a business leader, business owner, are making decisions to try things out and you think, well, I can't do that. i don't have the resources of Amazon.
00:08:59
Speaker
But you you have other things you can do at a smaller scale. if you are um heavy If you have a lawn care business or a um landscaping business and you want to try out installing security cameras, then you can create a blank space team, which you've talked about in the past. They can go out and see if you can if there's if the market is there, if the value is there, if their value delivery method is there.
00:09:26
Speaker
If it's not there, then you can reel back and remember what you learned, make some reports, put it all down on data, and then try something else later on. You need to continuously look for what the customer wants.
00:09:41
Speaker
So, another thing about this deal is it showcases the idea of how as leaders entrepreneurs, you want to stack your capabilities vertically to create resilience.
Strategic Acquisitions and Market Positioning
00:09:55
Speaker
So, by having their own studios, by then acquiring HBO and HBO Max, they can basically make the experience for the user better per dollar.
00:10:08
Speaker
They can also extend their their reach with respect to ah demographics. They can have new actors, new ideas put out there in different ways. So the the test bed has grown and so they can now expand on that.
00:10:27
Speaker
And that's something that as an entrepreneur that is should be very should be kept in mind because if the market shifts and you don't have a way to get to where it's going, you're hosed.
00:10:40
Speaker
As a matter of fact, the largest companies, the ones that the most successful, are typically leading the charge because they understand trends. They understand where things are going, so they get in front of the trend.
00:10:54
Speaker
so When it lands there, they're ready to go. I'm excited about this Netflix thing, to be honest. I think there's a lot of things at stake for sure. but you know This deal really underscores a lot about what Prefectory and the voice of growth is about.
00:11:12
Speaker
Mastering the Mind and Market. When you understand how businesses grow, even if they're massive $62, $82 billion dark transactions here, you can still take a lot from it to apply to your own organization.
00:11:28
Speaker
A lot of times as a business leader, we're paralyzed by fear. We look at a situation, we look at our resources, and we're fearful of of acting.
00:11:41
Speaker
And essentially, all we do is we defend and extend. Another tribute to Adam Hartung in his book, Create Marketplace Disruption, he talks about this idea of defend and
Learning from Failures: Sears and Toys R Us
00:11:53
Speaker
extend.
00:11:53
Speaker
Some of these organizations, you might know, like Troys R Us, like Sears, What they did, rather than innovate, rather than look at what's happening beyond tomorrow, we're talking about five years, 10 years, 20 years on the road, what are the trends behind that?
00:12:12
Speaker
They instead decided to defend their value and their value delivery and extend it. the The fact that they did that was their clear demise.
00:12:25
Speaker
the If you look at Sears, which was a corner of America for 100 years, what they did is they created a mail order business.
00:12:38
Speaker
They created this one-stop shop, sort of general mercantile to the nth degree. And they were the corner, literally the cornerstone of malls.
00:12:48
Speaker
So when Amazon came in and eKarmis came into the play, they They knew about it. They knew about it. But they chose to not go in that direction.
00:13:01
Speaker
They chose to defend and extend. And by doing so, we're signing their death warrant. It's sad because these organizations could have been powerhouses.
00:13:17
Speaker
Imagine in that boardroom, then instead of them being pride prideful about the fact that they are literally the corner of the mall, and who the hell are these people think that have this e-commerce business, if instead they said, you know what, we're gonna get in front of this.
00:13:35
Speaker
We're going to close half our stores, And the other half, we're going turn into a smaller model when people can buy the things that that are really high value that people know us for, Craftsman tools, some of the other features.
00:13:51
Speaker
And then the back will turn into a warehouse. And we'll become the the new quote unquote Amazon. We will ship things or people can order online and then they can come pick them up at the store.
00:14:03
Speaker
And as time progresses, as we get more momentum, we'll flip the model and we'll start to deliver them when they order them online. Sears could have been bigger than Amazon, bigger than Walmart combined, but they didn't go there.
00:14:19
Speaker
and now they are dead. Same thing can be said for Toys R Us. Same thing can be said for Kodak. And why do we talk about these things? Because we want you to look beyond what you have in front of you. We want you to to really understand trends, understand value and value delivery so that you are nimble, so that you're putting things in place and resources in place now.
00:14:45
Speaker
So when the market is there in three, five years, you're ready to go.
Strategic Discussions and Mitigating Bias
00:14:51
Speaker
It sounds a lot easier said than done, no doubt, but you need to take that first step.
00:14:58
Speaker
This $82.7 billion dollars deal is just a reminder for us to look at and really study and explore why these decisions are being made.
00:15:12
Speaker
And for yourself, being able to dissect your own strategy, bring in people that can challenge that strategy, and then apply it to your market and test it.
00:15:28
Speaker
There's so much value in bringing in outside help. doesn't have to be a consultant. It doesn't have to be some high powered group like Boston Consulting or um you know like Accenture whatnot. It can be some good friends. It could be a consultant. It could be a business coach. It could be your spouse. could be your cousin.
00:15:50
Speaker
But you need to create some people around you because you're already filled with bias. and then you're filled with fear and you're filled with with angst and anxiety, maybe not all at the same time, but even if you are an intrepid, very hard driving entrepreneur and you're gonna make mistakes.
00:16:20
Speaker
Now, if you bring your group around you, and you really tease out the bias and they bring up ideas that you didn't think about and rather than push them away, you say thank you and you write them down.
00:16:35
Speaker
Then you can go sit in your office, take a hike, whatever, and make that decision with the information you have on hand. Even if you decide to go in a direction completely different from what they said, you now have the tools and the resources ready.
00:16:56
Speaker
This is something that I've watched so many times in front of me, and this is something that I've done myself for a long time as well. If I'm fearful, if I have some issues that I'm working through in my mind from for my business, and i I have lunch with a friend or I make the time to talk about that with somebody, at the end of that,
00:17:21
Speaker
it's For me, it doesn't add anxiety, it actually takes it away because now I've got another vantage point.
Leveraging Discussions for Business Insights
00:17:27
Speaker
and Even if they say, look, man, what you're doing, what you what you want to do here, i wouldn't recommend it.
00:17:33
Speaker
At least now I understand maybe why they said that. and By understanding why, maybe I can mitigate why and and I can actually get around it or get beyond it So all these things in this conversation stem from this deal from Netflix.
00:17:51
Speaker
So let's watch out to see what happens in the next couple year or two here with this deal.
Learning from Netflix: Strategic Lessons
00:17:57
Speaker
I'm excited. Certainly there's a lot of hurdles that need to be addressed, but use this as an example to go down some rabbit holes on YouTube or on Google.
00:18:08
Speaker
as it pertains to value and value delivery. The more you understand that there is a difference between the two, the more you can take advantage of it for your own business to take it to the next level.
00:18:20
Speaker
Thank you. Cheers.