Netflix has long been seen as the winner in the streaming wars, with more than 325 million subscribers worldwide and hits like “Stranger Things” and “KPop Demon Hunters.”
For months, Netflix had been telling investors how it planned to take its business to new heights by acquiring Warner Bros. Discovery, a potentially transformative media deal.
But after the streaming giant stopped buying the media company in February, Netflix has faced persistent questions from investors about its plans to stay on top.
Reflecting investor unease, Netflix's stock price, which closed Tuesday at $73.68 per share, is down 21% this year and down 42% from a year ago.
“They obviously have a very successful business,” said Ross Benes, senior analyst at research firm eMarketer, adding that most of Netflix's revenue comes from its subscriptions. “Their investors always want to see more and more, and they mostly offer that.”
Part of the reason investors are anxious is that Netflix's share of U.S. television viewing time has steadily declined in recent months as rival YouTube has gained market share, according to Nielsen data.
Netflix accounted for 7.8% of all U.S. TV viewing in April, the lowest percentage since May 2025. A year ago it was 7.5%, Nielsen said.
In comparison, YouTube has seen its streaming audience share increase. YouTube's television viewing share in April rose to 13.4%, up from 12.4% a year earlier, Nielsen said.
Some investors fear that if viewership declines, subscribers could cancel the service, negatively affecting the platform's growing advertising business. It could also undermine Netflix's ability to raise prices in countries like the US.
Despite investor jitters, stock analysts estimate Netflix will have a strong second quarter, with revenue up 14% to $12.58 billion and net income up 8% to nearly $3.38 billion, according to FactSet. One reason is the continued growth of its advertising business and the popularity of new programming such as the police series “I Will Find You.”
Netflix will release its second-quarter earnings results on Thursday. The company declined to comment for this story.
Netflix has noted that it has a low churn rate compared to its competitors. The company said it has a long path to growth, penetrating only about 5% of the global television audience, according to a letter to shareholders in April. Several of its shows and movies appear on Nielsen's most-watched streaming charts.
Among the company's key priorities is expanding its entertainment offerings in areas such as live programming, gaming and video podcasts, as well as growing its advertising business.
“One measure of our performance is engagement, which is not just the number of hours watched, but also the quality of that experience for our audiences,” Netflix said in its April letter, adding that its main internal quality metric hit an all-time high in the first quarter.
“We believe we have significant advantages as we strive to become a must-have service for consumers: a strong global brand, a broad range of high-quality programming, a best-in-class product experience, and a frequent role at the center of culture,” Netflix said in its April letter.
Several stock analysts believe the Los Gatos-based company continues to grow and remain bullish on the stock.
The last time Netflix came under significant scrutiny from investors was in 2022, when it reported a decline in subscribers in the first quarter of that year. That pushed Netflix to pursue other initiatives, including selling cheaper subscriptions with ads, fighting password sharing and offering games on its service.
Last year, Netflix said it generated more than $1.5 billion in advertising and expects to roughly double that figure to $3 billion this year.
“We think this is a long-term growth company,” said Jessica Reif Ehrlich, senior media and entertainment analyst at BofA Securities, who has a buy rating on the stock.
As part of its diversification, Netflix has expanded its portfolio of live programming over the years, including adding NFL games and broadcasting Major League Baseball's Opening Day game.
But some analysts say Netflix needs to have a higher proportion of live sports content to entice sports fans to subscribe.
“They're getting a lot of casual sports fans, but avid sports fans don't need Netflix at all, not yet,” Benes said.
Additionally, Netflix is adding new content to its platform by partnering with YouTube creators, adding video podcasts like “The Breakfast Club,” and partnering with media companies like BuzzFeed Studio to bring videos as short as three minutes to its service, which could help with viewer engagement.
“They help existing subscribers use the service more,” Benes said. “Let's say I have a habit of watching all these video podcasts on Netflix. It might not be the reason I pay for them, but I might say, 'Oh, I don't know if I want to cancel them.'”
Some analysts believe Netflix should consider other acquisitions to drive future growth after moving away from Warner Bros. Discovery, which was acquired by Paramount.
Comcast announced earlier this year that it plans to spin off NBCUniversal, which has properties including “Minions” and “Jurassic Park.” Some analysts speculated that Netflix might be interested in buying it.
“From our point of view, it makes a lot of sense,” Reif Ehrlich said. “Universal also has a great movie and television library. Maybe not as deep as Warner Bros., but very strong.”
Netflix executives are also considering launching live channels, including those based on genres, and combining them with other streaming services, according to a person familiar with the matter who was not authorized to speak publicly. The Wall Street Journal was the first to report on the internal discussions.
Netflix launched TF1 live channels this year on its service in France in partnership with media company TF1 Group. TF1 said its audience targets set for an 18-month horizon were achieved in less than three weeks.
When it comes to Netflix's next move, anything is possible.
“Years ago, they said they wouldn't get into advertising. They wouldn't get into sports. They wouldn't have theatrical releases,” Reif Ehrlich said, mentioning efforts Netflix was initially reluctant to pursue before changing course. “So the business will continue to evolve and change.”
