Why You Should Think About Netflix Differently Now
Netflix (NFLX) describes itself to investors differently than it did two years ago. Live events and games were side initiatives in its pitch then; together with video podcasts, they now take a much larger place on its earnings calls. Netflix stock has lost 42% in the twelve months to September 30, 2026, while the S&P 500 rose 14.4%. You need to know which business you own when a stock falls that far. So what was Netflix’s pitch to investors two years ago?
Netflix’s Old Pitch Led With Hit Films And Series
On its fiscal Q3 2024 call, in October 2024, management called Netflix a subscription entertainment business. It spoke of improving its core film and series offering. It promised “a steady drumbeat of hit titles from countries around the world.”
Management said much the same on the fiscal Q4 2024 call, in January 2025. Asked about theatrical releases, co-CEO Ted Sarandos said Netflix’s core film strategy was to give members exclusive first-run movies on the service. The shareholder letter that quarter also listed live programming and games as newer initiatives to develop, after the Jake Paul–Mike Tyson fight and two NFL games on Christmas Day.
Management still talked about films and series on the most recent call, in July 2026. But the newer formats now take a much larger place in how it describes Netflix, and video podcasts have joined them.
Netflix’s Pitch Now Gives Live Events, Games And Podcasts A Bigger Role
Netflix’s pitch now includes live events, games and video podcasts. Its fiscal Q2 2026 call was held on July 16, 2026. Management said that the definition of TV has broadened, and Netflix’s definition has changed with it. It said it was adding to its slate of live events and scaling up cloud games. It said video podcast viewing comes on top of other viewing.
Live programming is still small by management’s own figures. Netflix expects live to be 5% of the content budget in 2026, but only 1% of viewing hours. Cloud games are growing fast. Monthly active players for cloud games grew elevenfold in the eight months before the call. We have no revenue figure for live events, games or podcasts from that call.
Netflix’s revenue still comes mainly from members paying to watch. Management named memberships, pricing and higher ads revenue as the main sources of growth for the third quarter. Viewing hours grew 2% in the first half of 2026. Management called that a slight acceleration from 1.5% in 2025.
Revenue grew 13.4% in the most recent reported quarter, and management guided to 12% for the third quarter on a reported basis. Its full-year guidance of 13% to 14% implies a pickup in the fourth quarter.
Is Netflix’s Shift To Newer Formats A Concern?
Yes, somewhat, because management now pitches formats that are still small. Viewing is growing slowly, and live programming is a tiny share of it. The change in emphasis is therefore more concerning than reassuring for a holder, for now.
Live events are the reassuring part, because they drive sign-ups. Management said 6 of the top 10 sign-up days in the past five years came from live events. Management also said those sign-ups can bring slightly higher churn. Live events matter for sign-ups even though they are a small share of viewing.
Wells Fargo analysts cut their rating on Netflix on September 18, 2026. They said the stock needs breakout hits to work again. Hits are what Netflix itself pitched two years ago. Netflix posts its third-quarter 2026 results on October 20, 2026.
Management has guided to slower revenue growth in the third quarter, and the newer formats are still too small to offset it. You would have less reason for concern if revenue grows more than 12%. Viewing hours growing faster than 2%, whenever Netflix next reports them, would be a second good sign. Revenue growth below 12% would mean Netflix is slowing by more than it guided.
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