Netflix enters 2026 with challenge and opportunities — Three things investors must keep in mind

Core Insights - Netflix is focusing on expanding its ad business, investing in growth, and refining its content strategy as it approaches 2026 with both momentum and uncertainty [1] - The next 12 months are critical for Netflix to determine its position as a leading entertainment platform or face increased costs for a potentially lengthy acquisition deal [2] Competitive Landscape - Netflix is engaged in a competitive battle with Paramount Skydance, which has made a $108.4 billion counteroffer for Warner Bros Discovery, indicating a significant acquisition battle [3] - The company must secure regulatory approvals from US and EU authorities, which have raised concerns about market power and viewer impact [4] Business Strategy - Netflix aims to expand its ad-supported tier, which currently has over 190 million monthly active viewers, but needs to convert this reach into sustainable high-value revenue [5] - Maintaining the momentum from 2025 will be challenging, as the company has experienced strong margin expansion and increasing cash flow this year [6] Investor Considerations - Investors should monitor Netflix's ability to navigate the competitive landscape with Paramount, the success of its ad-supported model, and the regulatory challenges that could affect its expansion plans [8]