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Netflix Finds Growth in International Markets and Live Events

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  Published in Stocks and Investing on Wednesday, January 28th 2026 at 3:30 GMT by The Motley Fool
      Locales: California, UNITED STATES

Netflix: Navigating Maturity and International Growth

The streaming giant, once defined by explosive subscriber growth, has entered a phase of maturity. The initial rapid expansion has naturally slowed, forcing a recalibration of strategy. However, dismissing Netflix as a spent force would be premature. The company's continued success hinges heavily on its international performance. While roughly 70% of revenue already originates outside the U.S., considerable potential remains in emerging markets, particularly in regions where internet access and disposable incomes are steadily rising.

Netflix's push into localized content - shows and movies produced in specific countries and tailored to local tastes - has proven largely successful. This strategy not only attracts new subscribers but also increases retention rates, reducing the costly churn that plagues the streaming industry. Furthermore, Netflix has strategically implemented price increases, offsetting slower subscriber growth with higher average revenue per user (ARPU). Crucially, 2025 saw the full impact of Netflix's crackdown on password sharing, a move initially met with some backlash, but ultimately proving to be a key driver of paid subscription numbers.

The competitive landscape, however, remains fierce. Disney+, HBO Max (now Max), and Amazon Prime Video continue to aggressively pursue market share, creating a fragmented environment. The challenge for Netflix isn't simply attracting new subscribers, but retaining existing ones amidst an abundance of choice and the increasing prevalence of short-form video platforms like TikTok. The recent foray into live events - like the successful 'Netflix is a Joke' festival and ongoing sports partnerships - represents a strategic diversification aimed at bolstering engagement and reducing reliance on purely on-demand content.

Alphabet: Regulatory Pressure and Emerging Technologies

Alphabet, the parent of Google and YouTube, remains a behemoth in digital advertising and a key player in cloud computing. Its diversified revenue streams - search, advertising, cloud services (Google Cloud), and YouTube - offer a degree of resilience. However, the company faces increasingly significant headwinds. Regulatory scrutiny has intensified globally. Antitrust investigations, particularly concerning Google's search dominance and advertising practices, continue to cast a shadow over its future growth prospects.

While Google Cloud has demonstrated strong growth, it still trails behind Amazon Web Services (AWS) and Microsoft Azure in market share. The company's ambitious investments in artificial intelligence (AI), particularly through its Gemini models, are showing promise, but monetizing these technologies remains a challenge. YouTube, while a significant revenue driver, is facing growing competition from TikTok and other short-form video platforms for advertising dollars and user attention.

Moreover, the shift towards privacy-focused advertising, driven by regulatory changes and consumer demand, is impacting Google's core advertising business. The deprecation of third-party cookies forces Google to adapt its targeting methods and rely more on first-party data, which is a complex and ongoing process. While Google is adapting, the impact on ad revenue has been noticeable in recent quarters.

The 2026 Verdict: Shifting Momentum

In 2024, the argument favored Netflix based on valuation and perceived growth potential. As of January 2026, the situation is more nuanced. While Alphabet remains a fundamentally strong company with substantial resources, the regulatory pressures and competition in key markets present significant obstacles to rapid growth. Google's focus on AI is promising, but the path to profitability from these investments is uncertain.

Netflix, despite its maturing market, appears to be executing its strategy more effectively. The success of its international expansion, password sharing resolution, and diversification into live events demonstrate a willingness to adapt and innovate. While subscriber growth is no longer exponential, the company is demonstrating an ability to drive revenue and profitability through other means.

Therefore, in early 2026, Netflix presents the more compelling growth pick, particularly for investors comfortable with moderate risk. However, it is crucial to remember that both companies operate in dynamic and competitive environments, and ongoing monitoring of their performance and strategic decisions is essential.