Netflix co-CEO Peters says WBD’s two-way split a sign of broader media shakeout in U.S.

The co-CEO of Netflix (NASDAQ:NFLX), Greg Peters, believes Warner Bros. Discovery (NASDAQ:WBD) splitting into two is an indicator of a broader “shakeout” happening in the U.S. media landscape, where streaming and on-demand platforms are currently prevailing over traditional TV.

In an interview with Bloomberg’s editor-in-chief John Micklethwait at the Founders Forum Global conference, Peters said, “Everything is moving to streaming—everything is moving to on demand. There’s going to be a period of shakeout and transition associated with that.”

“They have to rationalize their business for that reality” of streaming demand, Peters told Bloomberg. “We’re definitely seeing the results of that.” When asked whether legacy players in the market will merge, he said, “There’s an inevitable logic to that.”

The company on Monday announced it will split into two companies—one focused on streaming and the other focused on its networks—as linear TV viewership continues to dwindle in the U.S.

In November, Comcast (CMCSA) said it will pursue a tax-free spinoff of NBCUniversal’s portfolio of TV channels and list them as a separate public company, which will be called Versant.

Credit ratings firms Fitch, Moody’s, and S&P have all downgraded Warner Bros. Discovery to junk status this week after the two-way split announcement.