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Netflix Inc. (NFLX) is under growing pressure to reignite growth and boost viewer engagement as it cuts 1,000 jobs, overhauls its content leadership and bets on YouTube creators to win back audiences.
With the stock down more than 22% in 2026, investors are looking for a breakout hit that could reverse slowing momentum and strengthen Netflix's position in an increasingly competitive streaming market.
Netflix is replacing content chief Bela Bajaria with former Walt Disney Co. (DIS) Television and General Entertainment chairman Peter Rice, who takes over Oct. 26.
The change comes a day after Netflix announced plans to eliminate about 1,000 jobs, or roughly 6% of its workforce, mainly across product, technology, legal and human resources.
The company also faces mounting competition for viewing time from free, user-generated platforms. Alphabet Inc. (GOOG) (GOOGL) YouTube captured 14.2% of U.S. TV viewing in July, compared with less than 8% for Netflix.
LightShed Partners co-founder Rich Greenfield told CNBC on Thursday that investors often overlook Netflix's relative engagement because the company reports usage statistics while competing streaming services generally do not.
He argued that investors might be surprised by how little consumers use rival services relative to their cost.
Still, Greenfield acknowledged that Netflix is not satisfied with its own engagement levels.
"The issue with streaming is it's an engagement business, more than anything," Greenfield said.
Greenfield identified Netflix's growing creator strategy as an important potential growth driver.
He said the company is moving aggressively beyond traditional programming into video podcasts and is pursuing top YouTube talent.
According to Greenfield, the reaction from YouTube's team to Netflix courting creators indicates that its strategy is gaining traction. He noted that many of those deals have not yet launched, leaving more potential impact for next year.
Greenfield emphasized the importance of talent, saying, "talent matters."
Despite those initiatives, Greenfield sees content as the most immediate challenge.
"The big thing that needs to happen is they need a breakout," he said, adding that Netflix needs a major success across areas such as animation or scripted programming.
Greenfield said roughly two years have passed without the type of breakout content he believes could materially improve engagement.
Netflix has historically relied on blockbuster shows such as "Squid Game" to attract global audiences, drive engagement and dominate cultural conversations, making its search for the next breakout hit increasingly important.
Greenfield said Netflix's challenge resembles the broader problem facing Disney: investors want to understand where sustainable growth will come from rather than simply seeing more cost reductions.
He said companies need a clearly differentiated growth strategy instead of "more of the same."
The competitive landscape also extends beyond streaming. Greenfield said renewed investor enthusiasm around Meta Platforms Inc. (META) and artificial intelligence makes traditional media stocks more difficult to get excited about.
In his view, Netflix must compete not only with streaming rivals, YouTube and TikTok for viewing time, but also with technology companies and new AI products for consumer and investor attention.
Greenfield's outlook hinges on whether Netflix can turn its creator investments and leadership changes into stronger engagement and produce the breakout programming needed to reaccelerate growth.
NFLX Price Action: Netflix shares were down 3.87% at $69.80 during premarket trading on Friday, according to market data.
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