The twists and turns in Bridgerton, Squid Game, and Stranger Things all helped Netflix to attract users, propelling the company to a market valuation of more than $500 billion at its peak.

Now, the streamer needs to rethink how it tells its own story to investors.

The problem is its shares have floundered in 2026 lacking a clear and obvious catalyst. They were down 21% for the year through Thursday's close -- and slumped another 10% in Friday's premarket following a disappointing second-quarter earnings report.

The future of entertainment is likely to be the mobile phone but Netflix is dominant in TV. It is struggling to stave off competition from short-form video platforms like TikTok, YouTube, and Instagram.

The company said on Thursday that the amount of hours users spent on its platform grew 2% from a year ago over the first half of 2026. But its share of the overall U.S. streaming market is declining, per Nielsen.

The worry is that it's only a matter of time before the slowdown in engagement hits the company's top and bottom line.

There's a "negative narrative that if viewing hours are set to decline, then revenue and profits must quickly follow," says Robert Fishman, an analyst at the equity research firm MoffettNathanson.

Another problem is that Netflix is just giving the market the bare bones, at a time when it needs more meat.

The streamer stopped disclosing subscriber numbers last year, and said on Thursday that from 2027 it would start publishing its "What We Watched" engagement report once rather than twice a year.

Investors are worried that "Netflix's business is deteriorating," Morningstar analyst Matt Dolgin writes in a research note.

"Management's decision to pull back on its engagement report should only encourage this thinking," he adds, noting that the prospect of less data was probably the main factor dragging the stock down on Friday.

Without much engagement or subscriber data, there'll be even more focus on earnings and revenue -- which haven't looked great in recent quarters.

Netflix reported revenue of $12.56 billion on Thursday, a touch below the $12.58 billion analysts were looking for. Its third-quarter earnings guidance also fell short of expectations.

The numbers may look shaky, but keeping investors in the dark isn't the answer.

Instead, it's time for the streamer to start owning the narrative.

Write to George Glover at george.glover@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 17, 2026 09:01 ET (13:01 GMT)

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