Netflix: A Stream of Revenue, a Sea of Risk

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Netflix, it seems, has discovered that even art must occasionally bow to the demands of commerce. Their latest financial missive revealed a surge in revenue – a strong double-digit percentage increase, as they say – a feat predictable enough to be entirely unremarkable. The truly interesting thing, of course, is how they’ve achieved it. A rather vulgar embrace of advertising, it turns out. A curious development, considering their founder once treated the very notion with disdain. One might observe that consistency is the last refuge of the unimaginative, but in this instance, it merely appears to be shrewd adaptability.

This new stream of advertising revenue, exceeding $1.5 billion in the last fiscal year, is a spectacle to behold. A 150% increase, they proclaim with a rather tiresome enthusiasm. One wonders if they realize that to lose a subscriber is a tragedy; to lose many, merely a business opportunity. The question, naturally, is whether this makes Netflix a compelling investment with a modest $2,000. A question, I suspect, that deserves a more nuanced answer than any brokerage house is likely to provide.

A Pivot of Pragmatism

One must concede, Netflix’s management possesses a certain… talent. A stock price that has ascended nearly 21,000% in two decades suggests a level of competence beyond mere luck. They are, after all, the architects of a world where one can waste an entire weekend without leaving the sofa – a skill not to be underestimated. Their history is littered with strategic maneuvers – international expansion, original content – each a calculated risk, elegantly executed.

The introduction of an ad-supported tier in November 2022 was, let us be frank, a capitulation. A reversal of fortune, if you will. Mr. Hastings, once so adamant against advertising, has evidently discovered that principles are a luxury one can ill afford when subscriber numbers begin to wane. It’s a lesson many a proud artist has learned, and a rather ignominious one at that. The sudden shrinkage in subscriber count earlier in the year – a loss of 1.2 million souls – no doubt expedited the decision. Necessity, as they say, is the mother of invention… and occasionally, of compromise.

Their advertising revenue doubled in 2024, and has now surged by over 150%—a performance they anticipate will repeat itself, reaching $3 billion in 2026. One cannot help but observe that a rising tide lifts all boats… even those filled with slightly tawdry commercials.

Netflix, possessing a commanding lead in the streaming industry—superior content, a vast user base, unwavering engagement, and minimal subscriber attrition—was inevitably poised to capitalize on this advertising surge. It was, quite simply, the sensible course of action. It broadens their audience, particularly those sensitive to price, and allows them to extract yet more value. A most profitable vulgarity, wouldn’t you agree?

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A Gamble with Uncertain Returns

With $2,000, one could acquire approximately 24 shares of Netflix, based on the price as of January 29th. The stock’s current proximity to a three-year low price-to-earnings ratio is… intriguing, to say the least. However, the impending merger with Warner Bros. Discovery casts a rather long shadow.

The assumption of $42 billion in debt to finance this transaction is a maneuver fraught with peril. To borrow so heavily is to invite instability, to gamble with the very foundations of the enterprise. One might say it’s a bold move, but I suspect “reckless” is the more accurate descriptor.

I confess, I find little merit in acquiring this streaming stock at present. There are, after all, far more elegant ways to lose one’s money.

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2026-02-03 16:24