The premium streaming video wars are over, and Netflix won. Investors raked in the spoils of its victory as Netflix stock climbed, hitting an all-time high a month ago and a market value of $570 billion.
Now Netflix wants to be something else: Walt Disney. Or more specifically, an entertainment conglomerate like Walt Disney, but for a new generation. The company is spreading its wings into an array of entertainment areas. They include video games, live sports and other live programs like the talk show "Everybody's Live with John Mulaney," and even in-person attractions.
The success of these ventures will play a big part in whether Netflix meets its ambitious growth goals and continues delivering fat gains for shareholders. The company aims to double revenue by 2030 and to hit a key milestone — a $1 trillion market cap, the Wall Street Journal reported this spring.
"What can go wrong?" asked MoffettNathanson analyst Robert Fishman, who is positive on Netflix stock.
"It's how the company continues to sustain the level of growth that they are at," he told Investor's Business Daily.
How Subscription Fatigue Affects Netflix Stock
One worry is that consumers are showing signs of subscription fatigue, which could impact Netflix's user base.
Meanwhile, ad sales could become a bigger contributor to the streaming video leader. But lots of other big companies — Facebook parent Meta Platforms and Alphabet's YouTube among them — are hustling to rake in more video advertising too.
Netflix Subscriptions Hit Ceiling
Los Gatos, Calif.-based Netflix dominates the subscription video-on-demand market with its deep library of binge-worthy television shows and topflight movies.
Netflix reported a global subscriber base of 301.6 million at the end of 2024. It has extended its reach by adding a lower-price offering subsidized by advertising.
But attracting subscribers is no longer a major growth driver for Netflix. The company tried to fix the problem by cracking down on password sharing. The move helped drive a surge in new subscriptions, but that growth has hit a ceiling.
In a major move, the streaming giant stopped reporting subscriber numbers in its fourth-quarter 2024 report in April.
What's New For Netflix Stock
Netflix has begun urging stock investors to focus instead on revenue and operating margin. That's where its experiments with new growth initiatives could pay off.
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Netflix recently unveiled plans to open theme park-like attractions in shopping malls that leverage its popular shows like "Squid Game," "Stranger Things" and "Wednesday."
Imagine playing a game of "Red Light, Green Light" straight out of "Squid Game" but without risking your life, of course. Or rescuing friends from the Demogorgon from "Stranger Things." Those are the kinds of experiences Netflix has teased with its in-person attractions.
The Netflix House facilities will open in Philadelphia and Dallas at the end of 2025 and in Las Vegas in 2027, the company said.
Colin Dixon, an analyst with nScreenMedia, jokingly wondered if Netflix might one day offer ocean cruises like Disney. "Maybe it's a little early to think about that," he told IBD.
Netflix has also been cutting innovative content deals.
In June, the company signed a distribution agreement with France's largest commercial television company, TF1 Group. Netflix will stream TF1 channels and on-demand content on its platform to subscribers in France starting in summer 2026.
Sports is another focus. Netflix has ramped up live programming, such as its July 11 women's boxing event headlined by Katie Taylor's victory over Amanda Serrano.
And looking ahead, it's got the Sept. 13 Canelo Alvarez-Terence Crawford boxing match and two Christmas Day NFL games for the second year in a row.
A Disney Playbook For Netflix Stock
Another live venture was its May 31 in-person Netflix fan event at Kia Forum in Inglewood, Calif. Dubbed Netflix Tudum, the event promoted upcoming shows and movies. It featured celebrity appearances and musical performances.
The event actually borrowed a page from Disney's D23 fan conventions. That underlined what appears to be the tech giant's bid to transform itself into a Disney-like entertainment powerhouse. Netflix declined comment for this story.
Of course, Disney and Netflix have different stories.
Disney started out as an animation studio and moved into live-action features and theme parks.
From there, it added broadcast and cable television through acquisitions of ABC and ESPN, video game studios, and other entertainment properties. More recently, Disney has taken on Netflix with streaming services Disney+ and Hulu.
Netflix Market Cap Now
Netflix began as a DVD-by-mail rental service at the height of the dot-com boom in 1997. When broadband internet to the home became available, the company pivoted and went on to dominate the world of streaming, outpacing Disney's growth.
Netflix, which has dipped about 12% since hitting its record high on June 30, now has a market value of about $503 billion. Disney's market cap is near $215 billion.
Netflix is growing faster than its old-school entertainment peer and doesn't intend to slow down. It set an internal goal of doubling its revenue by 2030 from $39 billion last year, the Wall Street Journal reported in April. Also by 2030, the company wants to triple its operating income from last year's $10 billion. If it can reach those targets, it could hit a market cap of $1 trillion, the report said.
Netflix Advertising Model
With premium subscriptions slowing, the question is where Netflix will find new paths to growth.
"How could they get there? I think it probably would have to be driven by advertising," Third Bridge analyst Scott Kessler told IBD, highlighting one oft-discussed path.
Netflix recently added an ad-supported tier. Viewers who choose the ad plan pay $6.99 a month compared with $17.99 for an ad-free account. The move appears to be paying off, Kessler said.
Antenna Insights, a leading provider of data and analytics for subscription media services, estimates that Netflix's lower-cost ad-supported plan accounted for roughly half of all new paid subscriptions between January and April 2025. That's an 11% jump compared to the same period last year.
Netflix Stock: Betting On Ad Business
And Netflix is just getting started, Kessler stressed.
"Netflix has been around for a long time," he said. "This ad business has been around for a couple of years, essentially. I don't think there's any question that we're still in the early stages of them developing the offering and really perfecting how they go about monetizing."
Netflix's ad business will drive the overall business over the next few years, Kessler predicted. EMarketer, an industry research firm, estimates that U.S. ad revenue alone for the streaming giant will top $2.15 billion this year.
The company is "still in the process of launching a lot of the advertising tools that will enable marketers to get on the platform and reach the Netflix audience," Kessler said.
"But it's still early days," for Netflix ads, he added. "Just the nature of the offering where you get essentially a subscription fee as well as related advertisement revenue. That's something that I think is very attractive from a business model perspective."
Analyst Estimates For Netflix Revenue
MoffettNathanson's Fishman also pointed to the potential of Netflix's ad business. But he noted the challenges as well.
"Advertising is a completely different business for them," Fishman told IBD. "But we have pretty high confidence that they will execute and deliver, even if there are some hiccups on the road."
That skepticism is shared by many on Wall Street. Analysts expect annual revenue to surge 87% to $72.8 billion by 2030, which would fall short of the company's internal sales target of about $80 billion.
Netflix Stock: Leveraging Customer Data
As Netflix expands into new entertainment offerings, it can play to its strengths: its enormous scale and massive amounts of customer data.
The company can leverage those strengths to decide which content deals to strike. Netflix is expected to use the TF1 deal in France as a template, nScreenMedia's Dixon said.
In fact, in late July, Netflix forged a similar content bundling partnership with top Middle East broadcaster MBC Group.
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"Netflix is now aggregating and selling other people's content," Dixon said. "They're not licensing it."
Meanwhile, Netflix can follow a path blazed by Amazon by using customer data to its advantage, Kessler said.
"Amazon has been around since the 1990s gathering data and information about its user base," he said. "They're able to use that in the context of building an advertising business."
There's nothing stopping Netflix from following that playbook.
"You can envision a scenario where they start incorporating data and information they're able to more effectively target," Kessler said. "Then they have the infrastructure to really allow advertisers to come on and buy advertising in a way similar to the way they do that in a variety of other contexts with other providers."
Netflix Stock: Live Events Include NFL Games
Netflix is also heavily investing in live events, especially sports, to boost its advertising sales.
"I know they're pursuing live versions or spins on some of their reality-type shows, (and) some of their competition-type shows," Kessler said. "But I think live events are super important to how the company thinks about engagement and growth going forward."
The streamer's live sports debut came in November with a golf tournament featuring stars from its popular Formula One series.
Netflix paid $150 million for the rights to broadcast two NFL games on Christmas Day and in January, and aired the first WWE Raw event as part of its $5 billion deal with the popular wrestling league. The company also is in talks with music streamer Spotify Technology to partner on projects like a live concert series and music awards shows, the Journal reported.
Netflix User Experience
Kessler cited an important Netflix strength: the ability to offer a user experience that is considered the industry gold standard. And that's important since engagement is key to revenue growth.
This is also crucial given how the streaming market can be volatile, with subscribers frequently cycling through various services rather than sticking with one streamer for a long time.
Offering the same gold standard in live events will be challenging. But on a July 17 conference call with analysts, Netflix Co-CEO Ted Sarandos reiterated that the company remains "focused on ownable, big breakthrough events."
"Anything we chase in the event space or in the sports space has got to make economic sense as well," he said.
Netflix is exploring adding video podcasts to its platform, Business Insider reported recently. In doing so, it would take on free TV behemoth YouTube, owned by Google parent Alphabet.
Where Netflix House Fits In
One initiative that will likely draw much attention will be Netflix's foray into in-person Disneylandesque attractions, like Netflix House.
Netflix is simply looking to broaden its consumer touchpoints, Fishman said. Those attractions will feature "story-driven experiences," games, theaters, themed dining and the obligatory gift shop.
"It's an early sign of more to come probably," he said. "This is an early experimentation phase."
Netflix is dabbling in other arenas as well. One is video games, a tough market where Disney has struggled.
"The games space is a difficult nut to crack," Dixon said. But Netflix will be trying something new with "party and couch co-op games." Details are scarce, but the company sees its upcoming interactive games as a successor to family board-game night.
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"Family game night is a great strategy because these will run inside of the Netflix app," Dixon said. Plus, the interactive games can be sponsored and stream ads, he said.
Then there's children's programming. That's one area where Netflix and Disney are already butting heads.
The animated preschool series "CoComelon" will move from Netflix to Disney+ in 2027. Disney outbid Netflix for the rights to the popular program, according to news reports.
But Netflix will be getting Cookie Monster and friends at "Sesame Street." Though it won't be an exclusive arrangement, the next season of "Sesame Street" will be available on Netflix later this year, while also airing on PBS stations and PBS Kids digital platforms.
Keeping Netflix Customers Engaged
In the end, the success of Netflix's expansion push will rely on its ability to keep customers engaged and to outmaneuver rivals in an increasingly competitive entertainment and media landscape.
"Engagement is hugely important," Kessler said. "If folks aren't using the product, the next step is maybe they're not going to continue to pay for the product."
The streaming video business will continue to be "a dogfight," Kessler said. "These are big companies with big budgets. … Netflix has a head start, (it) has a large user base and it has a massive content budget, as well as plans to spend in the future. So, they're well positioned, but it will remain super competitive."
The company's competitive position was underlined two weeks ago when it reported second-quarter results.
Netflix posted only a modest beat on sales and earnings, which sent the shares falling. But it got upbeat reviews for what one analyst called an "exceptional slate of content" for the second half of 2025.
Is Netflix A Good Stock To Buy Now?
Netflix stock is up 33% year to date, through Wednesday's close. On April 21, the stock broke out of a double-bottom base with a buy point of 998.70, according to IBD MarketSurge charts. It hit an all-time high of 1,341.15 on June 30 before stalling.
Netflix stock has an IBD Relative Strength Rating of 91, meaning it's in the top 10% of stocks for performance over the past 12 months. Its IBD Composite Rating is a stellar 98 out of 99, according to IBD Stock Checkup.
But the time is not right to buy Netflix stock, according to smart growth stock investing principles and technical analysis. The stock has lost ground for five weeks in a row. On July 18, it fell below its 50-day moving average line, a negative sign.
Investors should wait for the stock to show signs of improving. They should look for it to pull up above the 50-day line again and form a sound base with a proper buy point. (Learn more about investing in "7 Lessons On How To Invest In Stocks.".)
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks. Please follow Alexis Garcia on X @IBD_Alexis for more coverage.
