Netflix: A Curious Case for Investors

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Now, listen here. Netflix, that streaming contraption, has been having a bit of a wobble, hasn’t it? Shares have tumbled more than 38% from their peak last June – a proper plummet, like a sack of old potatoes. And then came the news of a deal with Warner Bros. Discovery, followed by earnings that weren’t exactly bursting with sunshine and lollipops. A gloomy business, really.

But some investors, the patient sort, are clinging on, hoping for a bounce. Let’s have a peek at three things they ought to know, shall we?

1. 2026: Not Quite the Same Magic Beans

Last year, Netflix enjoyed a bit of a lucky streak. Exchange rates were kind, allowing those foreign earnings to swell like overripe plums. They pocketed an extra $541 million just from that little trick! And they slyly bumped up prices for customers in the US and Canada. A clever move, that. But don’t expect that again before 2027. They might try a price tweak here and there in other countries, but the big squeeze is done for now.

All this means they’re predicting growth of 12% to 14% in 2026, which is… well, it’s not the 16% they managed last year. A bit of a slowdown, wouldn’t you say?

2. Growing Profits, Like a Well-Fed Slug

Now, despite the slower growth, things are getting… stickier, in a good way. They’re turning 29.5% of their revenue into profit, and they’re aiming for 31.5% in 2026. It’s like they’ve discovered the secret to squeezing every last penny out of their subscribers. They’re remarkably good at predicting what they’ll spend on all those fancy shows and films – and then making sure they don’t spend a bean more. It’s a bit unnerving, really, how precise they are.

3. The Warner Bros. Discovery Deal: A Monstrous Mess?

Ah, yes, the deal. A merger with Warner Bros. Discovery. It’s a monstrous undertaking, and it won’t be finalized until late 2026 or early 2027, if it happens at all. The regulators are sniffing around, and there’s a mountain of debt involved. It’s a bit like trying to build a castle on quicksand, isn’t it?

And what will they do with all those films and shows? Will they stop showing them in cinemas and keep them all for streaming? Will they stop selling shows to other networks? Both could backfire spectacularly. There’s a lot of overlap between Netflix and HBO subscribers, so bundling them together might not be as brilliant as it sounds. It could actually reduce profits, at least for a while.

It’s a complicated business, this. A lot could go wrong. But if they can pull it off, if they can successfully gobble up Warner Bros. Discovery and turn it into a streaming behemoth… well, that would be something to behold. Keep your eyes peeled, my friends. This is going to be a bumpy ride.

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2026-02-06 16:52