Why Is Netflix Still the King of Streaming but Its Stock Is Down?

Netflix: The Big Kid on the Streaming Block

Imagine Netflix as the kid who always won the playground game of "who has the most friends." It has more than 325 million subscribers around the world. That’s like if everyone in a huge country all paid to watch movies and shows!

Some of its super-popular shows include:

• Stranger Things (a sci-fi adventure kids and adults love)
• KPop Demon Hunters (a fun mix of music and fantasy)

The Plan That Didn’t Happen

For a while, Netflix told its investors (the people who put money into the company) that it wanted to get even bigger by acquiring (buying) a company called Warner Bros. Discovery. This would have been a massive deal that changed Hollywood.

But in February, Netflix passed (said no thanks) on buying Warner Bros. Discovery. Instead, another company called Paramount scooped it up.

Important Point: After saying no to that big purchase, investors started asking Netflix, “What’s your plan to stay on top?”

Investors Are Worried — and the Numbers Show It

Because investors are nervous, Netflix’s stock price (the cost of one tiny piece of the company) has dropped:

• Closed Tuesday at $73.68 per share
• Down 21% this year
• Down 42% from a year ago

Ross Benes, an analyst (a person who studies companies) at eMarketer, said Netflix’s business is successful and most of its money comes from subscriptions (people paying monthly). But investors always want more growth.

Viewers Are Watching Other Things

Part of the worry is that in the U.S., Netflix’s share of TV watching time has slowly gone down. A company called Nielsen counts this stuff.

Here’s what they found:

• Netflix was 7.8% of all U.S. TV viewing in April (lowest since May 2025; it was 7.5% a year ago)
• YouTube (the video site) went up to 13.4% in April (from 12.4% a year earlier)

Some investors fear:

• If fewer people watch, they might cancel Netflix
• That could hurt Netflix’s growing ads business (showing commercials)
• It could also make it harder to raise prices (charge more) in places like the U.S.

But Analysts Still See Good Things

Even with the worry, experts think Netflix will have a strong second quarter:

• Revenue (total money made) up 14% to $12.58 billion
• Net income (profit) up 8% to nearly $3.38 billion

Why? Advertising is growing, and new shows like the crime series I Will Find You are popular. Netflix will share its earnings results on Thursday. (The company didn’t comment for this story.)

Netflix also says:

• It has a low churn rate (few people leaving compared to rivals)
• It’s only in about 5% of global TV viewing — so lots of room to grow
• Many of its shows are on Nielsen’s most-watched lists

What Netflix Is Doing to Grow Up

Netflix’s key priorities include:

• Broadening entertainment (live shows, games, video podcasts)
• Growing its advertising business

In its April letter to shareholders, Netflix said:

“A measure of our performance is engagement, which is not just the quantity of hours watched, but also the quality of that experience for our audiences.”

It also said it has:

• A strong global brand
• High-quality programming
• A great app experience
• A big role in culture

Learning From the Past

The last big scare was in 2022, when Netflix lost subscribers. Back then it started:

1. Selling cheaper subscriptions with ads
2. Cracking down on password sharing (making people pay if they weren’t the account owner)
3. Offering games on the service

Last year, Netflix made over $1.5 billion from ads and expects about $3 billion this year.

Jessica Reif Ehrlich, an analyst at BofA Securities, says: “We believe this is a long-term growth company.”

Sports, Podcasts, and More

Netflix is adding live programming:

• NFL games (including Thanksgiving eve)
• Major League Baseball’s opening day game

But some say Netflix needs more live sports to attract big sports fans.

• Benes: “They’re getting a lot of casual sports fans, but avid sports fans don’t need Netflix at all really, not yet.”

Netflix is also:

• Partnering with YouTube creators
• Adding video podcasts like The Breakfast Club
• Working with BuzzFeed Studio to add short 3-minute videos

Benes says these help keep subscribers from canceling: “Let’s say I get in the habit of watching all these video podcasts on Netflix… I might say, ‘Oh, I don’t know if I want to cancel it.’”

Could Netflix Buy Someone Else?

Some analysts think Netflix should buy another company after skipping Warner Bros.

Comcast announced it will spin off (separate) NBCUniversal, which owns Minions and Jurassic Park. Reif Ehrlich said buying it “makes a ton of sense” because of its strong film and TV library.

Netflix is also thinking about:

• Launching live channels (like genre-based TV)
• Bundling with other streaming services (one price for many)

It already launched TF1 live channels in France with great success (hit 18-month goals in under 3 weeks).

Important Point: Netflix once said no to ads, sports, and movie theater releases — and later did all of them. So its future moves are wide open!

Summary

Netflix is still the world’s biggest streaming service with 325M+ subscribers and hit shows. But its stock is down because it passed on buying Warner Bros., U.S. viewing share slipped as YouTube grew, and investors want more growth. Still, experts see strong earnings, low cancellations, and big plans in ads, live sports, podcasts, and maybe new buys like NBCUniversal. Netflix keeps evolving — anything is possible.

FAQ

1. Why did Netflix’s stock go down this year?
Because it didn’t buy Warner Bros. Discovery, its U.S. viewing share dropped a bit, and investors are unsure how it will keep growing. The stock is down 21% this year and 42% from last year.

2. What is “churn rate”?
It’s how many people cancel the service. Netflix says its churn rate is low, meaning few people leave compared to other streaming apps.

3. How is Netflix trying to keep viewers?
By adding live sports (NFL, MLB), video podcasts, short videos, games, and maybe live channels or bundles. It also grew its ads business.

4. Could Netflix buy NBCUniversal?
Some analysts think it makes sense because NBCUniversal owns popular movies and shows. But nothing is confirmed.

5. Is Netflix still making money?
Yes! Analysts expect revenue of $12.58B and profit near $3.38B for the second quarter, with ad growth and new shows helping.