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Claire Holubowskyj, at Enders Analysis, said many issues had been 'brewing for quite some time' and the arrival of a new chief executive hadn't resulted in a 'material step change'.

She said: 'Rose needs time to get going, but the business does not necessarily have lots of time to give her as the results have been so negative for a while.'

She added that with AI taking a dominant role it was 'unsurprising' creative staff were getting 'jittery' about the future.

'If that's the new direction, they will be worrying about what that means for the traditional model of creatives driving well-thought-out ad campaigns.'

"It is Ted Sarandos who is behind Netflix's original creations - which initially tended to make acquisitions - and behind the fact of offering a whole series allowing binge watching," emphasizes François Godard, analyst at the firm Enders Analysis.

Even if it's not without risk. "He'll have to prove that there won't be any destruction of value with an acquisition of this size," François Godard reiterated. A challenge, especially since the CEO himself pointed out in October, during a conference call with analysts, that Netflix had grown without mega-acquisitions. Until now.

The lukewarm reception may not actually matter. "The main purpose of Prime (alongside peripheral things like making the overall Prime subscription even more stickier for consumers) is to sell third-party video subscriptions and rent films – original Prime content is a hook to get viewers there in the first place," explains Tom Harrington of media researchers Enders Analysis

Ahead of the announcement of the deal, Tom Harrington, head of television at Enders Analysis, said it was hard to gauge whether the takeover would be approved by regulators, but if it went through it would have a massive impact on cinema.

"Were it to go through it would reorient Hollywood," he said.

Mr Harrington said there was likely to be "big reductions" in television and film output from a newly-merged company, which would lead to resistance to the move from parts of Hollywood and relevant unions.

For consumers, Mr Harrington said a merger was likely to lead to higher prices.

"Netflix would get more expensive and even though HBO Max would be shuttered/become non-essential, the greater penetration of Netflix households would likely mean an increase in total overall subscription revenues."

François Godard, Media and Telecoms Analyst at Enders Analysis, provided a stark warning about the deal, which has been confirmed in the past few minutes and will see Netflix purchasing the Hollywood studio behind the likes of Succession and the Harry Potter films for a total enterprise value of $82.7B.

“My first reaction is, watch out, Netflix,” he said. “The merger of Warner Bros. and Discovery destroyed value, and the risk is that this new deal will also produce a result smaller than the addition of the parts. HBO, the most brilliant TV creative house survived Zaslav, but will it die under Netflix?”

“HBO Max, due to launch next quarter in the UK, Germany and Italy, would already be scheduled to close,” said Godard, who also pointed to other WBD assets that would face uncertain futures.

Launching a standalone gaming app shows a sharpening of focus for the company’s gaming strategy, allowing Netflix to more easily track metrics like player engagement and relative popularity of various gaming IPs, “with substantially less risk related to the primary video application,” according to Gareth Sutcliffe, the head analyst covering the games industry for the market research service Enders Analysis. 

“There is clearly still a long road to travel before we see a full integrated single button Netflix app, not least as the vast majority of Netflix subscribers have yet to even enter the discovery phase on gaming, but a dedicated single gaming app would seem the obvious next step,” he said.

Claire Holubowskyj, senior research analyst at Enders Analysis, identifies an arms race between agencies and tech platforms that the former are struggling to win. “Ad agencies have more and more in-house tech divisions, which they bought in over the last six years, but they’re just not as advantaged by it as the big platforms, because they don’t also own the supply and the data,” she says. But she acknowledges that creative skills remain something agencies do better, as clients are uncomfortable with the lack of transparency in how generative AI creates adverts.

She notes that strong brand-building campaigns are showing benefits over pure performance campaigns even in the platform’s own data. Laurence Green, director of advertising effectiveness at the Institute of Practitioners in Advertising, says only 3% of sales-activation advertising makes a long-term sales contribution while 95% of brand-building advertising also drives short-term sales.

François Godard, at Enders Analysis, describes Paramount’s entry into the market as a “side effect of the AI bubble”, reflecting how Ellison has cashed in on the recent boom in technology investment.

“It is not sustainable for fans and it is not sustainable for the industry because you leak fans to piracy,” says Godard.

“In a world of fragmented experiences and high diversity of cultural offerings, I think the uncertainty and collective experience of live sports is unique, and I am not ready to discount it,” says Godard.