Netflix & Chill…With Caution

by

One gathers that Netflix (NFLX +0.37%) continues to perform adequately. Sixteen percent revenue growth to $45.2 billion, operating income up 28%, and a respectable 325 million subscribers. Perfectly serviceable, really. Though one does begin to wonder if all this upward trajectory isn’t rather…tiring.

It appears, however, that a small cloud has drifted across the otherwise sunny landscape. A warning sign, as the chaps are calling it. How terribly dramatic.

Lagging the Overall Streaming Market

The rather obvious point that streaming has usurped the throne of traditional television is, of course, hardly news. One recalls a time when one actually paid someone to dictate what one might view. The barbarity of it all! Now, fewer than half of American households cling to the antiquated notion of cable. A mere 88% penetration in 2010, reduced to…well, let’s not dwell on the decline. It’s all frightfully predictable.

Nielsen informs us that streaming – excluding Netflix, naturally – now commands 37.7% of viewing time. A rather substantial 52% growth rate, if one is inclined to be impressed by such things.

Netflix, despite its dominance (or what passes for it these days), has only managed a paltry 15% increase in viewing share, rising from 7.5% to 8.6%. A distinctly unimpressive showing, wouldn’t you agree?

Alphabet’s YouTube, that repository of amateur theatrics and feline videos, is apparently winning the race. One shudders to think.

This, my dears, is the warning sign. Rivals are snatching at viewer attention with a rather unbecoming eagerness. The competition is stiff, not merely from the usual suspects, but from those infernal social media applications. And Netflix’s reluctance to invest in live sports is, shall we say, strategically questionable.

Management, predictably, remains optimistic. Their Q3 press release blithely asserts that “substantial linear viewing globally” leaves ample room for expansion. One suspects a touch of wishful thinking.

Loading widget...

Paying Up for More Eyeballs

Tracking engagement is, apparently, a priority. Subscribers watched 96 billion hours of content in the latter half of 2025, a mere 2% increase year over year. One wonders if that’s quite enough to justify the current valuations.

Netflix now seems intent on acquiring TV and film studios, HBO Max, and the contents of Warner Bros. Discovery for a staggering $82.7 billion. One suspects this is less about strategic synergy and more about desperately trying to buy their way to increased viewership.

It’s difficult to criticize Netflix, given its past performance. But investors should be aware that future growth will likely be…less enthusiastic. A rather tiresome prospect, really. One hopes they have a decent champagne cellar to weather the storm.

Read More

2026-02-02 14:02