The recent selloff in top streaming stocks is giving investors an opportunity to be more critical about the future of the business.
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Netflix has increased its subscription prices in the US, increasing the prices of its standard and premium plans. Starting March 26th, we started offering new rates for new members.
If investors were coming up with a list of the best stocks of the century, there’s no question that Netflix would be it. (NASDAQ: NFLX) You’ll be in that group. It’s definitely one of the most disruptive businesses on the planet. And the company’s share price performance, up an astonishing 22,700% over the past 20 years, proves this point.
However, streaming stocks have fallen 30% since peaking in June 2025. Perhaps the market is losing interest. Here are three red flags that suggest Netflix’s best days are behind it.
1. Netflix is about to make a major acquisition.
On February 26, Netflix walked away from a deal to acquire some assets of Warner Bros. Discovery in what could have been a significant deal with an enterprise value of nearly $83 billion. This was an unusual announcement from Netflix, which has historically avoided large contracts. Instead, we rely on organic growth to expand our revenue and membership base.
But the proposed deal may have been a clear sign that Netflix’s management needs a deeper catalog of content than it can develop internally to sustain the company’s success. And in order to do so, he paid a considerable amount of money and was willing to take on a large amount of debt.
2. Engagement metrics are tricky
It’s no surprise that engagement is an important data point to focus on, as it indicates the value Netflix is providing to its viewers. The streaming platform’s share of daily TV viewing hours in the U.S. rose from 7.5% in Q4 2022 to 8.8% in January 2026, according to Nielsen data. During the same period, the overall streaming market share (excluding Netflix) increased by 54%, from 24.8% to 38.2%. In other words, Netflix is losing its edge in attracting attention within its own market.
And it’s far behind Alphabet’s YouTube. The user-generated video streaming platform captured a 12.5% share of U.S. TV viewing time in January, beating Netflix by 42%.
3. Content costs may continue to rise
After exiting its acquisition of Warner Bros. Discovery, Netflix announced it plans to spend $20 billion on content in 2026. Ten years ago, in 2016, it spent $6.9 billion here.
The industry is extremely competitive these days, as a Motley Fool study revealed that 62% of customers think there are too many streaming services on the market. This means there is also competition for content creation and licensing. And now, as Netflix focuses more on live sports and events with a bidding process, there is no doubt that content costs will continue to rise over time, perhaps even higher than expected.
Neil Patel has no position in any stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Netflix, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
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