Netflix wants to drop $72B on a studio that the market priced at $30B a few months back. The deal isn’t done yet. Regulators still need to bless it. Shareholders still need to vote. Politicians are already sharpening their knives. But if it goes through, Netflix will own HBO, Warner Bros., and a vault of IP that people actually care about. Netflix already spends billions making content. They’ve been doing it for years. The debt’s already on the books. The volatility’s already baked in. They’ve been operating like a studio for a decade; they just didn’t own the legacy catalog. So what are they actually buying? Leverage. Pricing power. IP that’s already proven. A brand people trust. Maybe bundling Netflix’s scale with HBO’s prestige gives them cover to raise prices without bleeding subscribers. Maybe owning the competition instead of fighting it locks in market share when streaming consolidates into two or three giants. Maybe. They’re paying a 140% premium for assets that aren’t growing and a business model that’s already under pressure. Studios don’t compound. They churn. Columbia got bailed out by Sony. Universal by Comcast. MGM by Amazon. The pattern holds: feed the machine billions, watch it spit out hits and misses, then wait for the inevitable rescue by some cash-rich suitor in love with the romance of Hollywood. And that’s before AI rewrites the entire game. When you can cut production costs by 75% or 80%+, the floodgates open. We’re standing at the edge of the most unprecedented change in filmmaking we’ve ever seen. More creators. More content. Lower barriers to entry. YouTube already figured this out. They built a distribution platform and let creators feed it. No billion-dollar content budgets. Just ad revenue splits and scale. Netflix, meanwhile, keeps writing checks to studios while YouTube quietly becomes the biggest winner in the creator economy. Netflix used to win by being disciplined. They built infrastructure while everyone else overpaid for content. They played the long game. They avoided heroics. Now they’re the ones overpaying. Could it work? Absolutely. The strategic logic might be sharper than it looks from the outside. But for the first time in years, Netflix needs everything to go right. And that’s not how durable MOATS are maintained. What do you think? Another one of Munger’s Follies or a brilliant acquisition? In time, we will see which. https://lnkd.in/e4iikmPf