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Netflix Faces Investor Test as Advertising and Gaming Bets Seek Payoff

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Netflix (NFLX.O) heads into its third-quarter earnings report on Tuesday facing a pivotal moment: can its billion-dollar pushes into advertising and gaming justify its $120 billion stock rally this year and sustain growth beyond its streaming roots?

Analysts expect the company to post its fastest revenue growth in over four years, driven by blockbuster releases such as “KPop Demon Hunters” — its most successful film to date — and the return of “Wednesday.” The fourth quarter also looks promising with the final season of Stranger Things set to draw massive viewership.

Yet some investors are skeptical. Netflix stopped reporting subscriber numbers earlier this year, shifting focus to revenue and profit metrics, which has heightened pressure on its new ventures to perform. The company has spent about $1 billion building its gaming division, acquiring studios and developing over 120 mobile titles, including “GTA: San Andreas” and games inspired by hits like “Squid Game: Unleashed.”

So far, the results have been underwhelming. According to Omdia, Netflix’s games have increased user engagement by less than 0.5% after four years. Co-CEO Greg Peters defended the slow progress, comparing the rollout to Netflix’s early struggles in Japan — suggesting success will take time.

Netflix’s gaming challenges mirror those of other media giants such as Warner Bros Discovery, which have also struggled to turn big franchises into profitable games. Analysts note that Netflix’s lack of iconic intellectual property limits its competitive edge.

Meanwhile, Netflix’s ad-supported subscription tier — now available in key global markets — is emerging as the company’s most promising new revenue stream. Analysts estimate it generated around $662 million in Q3 and already attracts over half of new subscribers, totaling roughly 94 million users. Still, its overall impact remains small compared to Netflix’s projected $11.51 billion in quarterly revenue and $3.01 billion in net profit, representing jumps of 17% and 27%, respectively.

Investors like Brian Mulberry of Zacks Investment Management caution that while these new segments may eventually diversify Netflix’s revenue, “in the short term, they are not profitable.” The coming quarters will reveal whether Netflix’s gaming and advertising bets can transform from costly experiments into real growth engines.

Spotify and Netflix strike deal to stream popular video podcasts starting 2026

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Netflix and Spotify have announced a new distribution partnership that will bring some of Spotify’s most popular video podcasts to Netflix’s platform starting in early 2026. The move aims to expand Netflix’s entertainment portfolio and give Spotify creators access to a broader global audience.

The initial lineup will feature hit shows including “The Dave Chang Show,” “The Bill Simmons Podcast,” “The Rewatchables,” “The Big Picture,” “The Zach Lowe Show,” and “Serial Killers.” However, “The Joe Rogan Experience”, Spotify’s most-streamed podcast globally, will not be part of the deal.

Netflix said the collaboration reflects its push to diversify beyond scripted series, films, and reality programming, as video podcasts become an increasingly popular format among younger viewers. “Our partnership with Spotify allows us to bring full video versions of these top shows to both Netflix and Spotify audiences,” said Lauren Smith, vice president of content licensing and programming strategy at Netflix.

For Spotify, the tie-up provides an opportunity to extend the reach of its creators by leveraging Netflix’s vast global subscriber base. “This offers more choice to creators and unlocks a completely new distribution opportunity,” said Roman Wasenmüller, Spotify’s vice president and head of podcasts.

The new feature will launch in the United States first, followed by an international rollout, with no financial details disclosed.

Netflix teams up with AB InBev for global beer and TV co-marketing deal

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Netflix and Anheuser-Busch InBev (AB InBev) have struck a global co-marketing partnership that will bring together two leisure giants: beer and streaming. The collaboration aims to link Netflix’s top series with AB InBev’s best-known beer brands through campaigns, packaging, and event tie-ins.

The deal will highlight shows like The Gentlemen (UK drama) and Culinary Class Wars (South Korea) with limited-edition beer packaging and online promotions. While financial terms weren’t revealed, both companies signaled it as a long-term push to merge entertainment and social drinking occasions.

AB InBev, whose portfolio includes Budweiser, Stella Artois, and Corona, will also advertise during Netflix’s growing slate of live programming, including the NFL’s Christmas Day broadcast. Future collaborations will extend to global sports spectacles such as the 2027 Women’s World Cup.

Netflix, which launched its advertising tier less than two years ago, already reaches over 94 million users worldwide. The company sees this ad-supported tier as a major growth engine, especially as live sports give it access to large, sponsor-friendly audiences.

Marcel Marcondes, AB InBev’s Global CMO, said the partnership plays into natural habits: “Streaming is a social and shared experience — it’s an occasion where beer and entertainment come together.”

This move underlines how Netflix is expanding beyond just content production to build partnerships that link its cultural reach with brands looking for mass exposure.