Netflix's next attempt at growth takes on TikTok and Instagram Reels

Brian SozziWed, April 22, 2026 at 11:51 AM UTC

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Once Netflix (NFLX) executives lick their wounds after failing to close the big deal with Warner Bros. Discovery (WBD) and delivering subpar first quarter results, they will return with a new pitch to investors: vertical video as a growth strategy and value unlock.

What Netflix is doing: JPMorgan analyst Doug Anmuth said in a note on Wednesday that he expects Netflix to launch a "vertical video feed" on mobile later this month.

"Overall, we view vertical video as a way to engage users on another screen beyond the TV, and capture share of shorter, snackable moments, which could ultimately lead to increased engagement with Netflix's longer-form content," Anmuth said.

Anmuth thinks the vertical video platform will touch a few different components. It's likely to include clips from original film and TV series, along with newer Netflix content verticals, such as video podcasts. Anmuth also expects Netflix to integrate select creator content from creators like Ms. Rachel, Mark Rober, similar to YouTube Shorts (GOOG, GOOGL) and Facebook Reels (META).

Anmuth added, "We believe Netflix's vertical video strategy will expand discovery across a wider range of content & drive greater personalization/socialization, including through Netflix's scene-clipping feature called Moments."

But don't forget a few weeks ago: Netflix's earnings day on April 16 came up short. Investors were frustrated that Netflix failed to raise its full-year 2026 revenue guidance from $50.7 billion to $51.7 billion. The company’s full-year operating margin guidance of 31.5% came in below the 32% analysts had modeled, suggesting that the "breakup fee" gains from the Warner Bros. Discovery deal are masking higher content amortization costs.

Adding to the uncertainty, longtime chairman Reed Hastings announced he is officially stepping down, marking the end of an era just as the company faces increasing pressure to prove its advertising business can truly scale.

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Netflix stock plunged 9% the day after its earnings report. The stock is down 1.3% this year, compared with a 3% gain for the S&P 500 (^GSPC).

"Netflix is just like a snooze fest," Portfolio Wealth Advisors president and chief investment officer Lee Munson said on Yahoo Finance's Opening Bid (video above). "We have decelerating growth. I don't know why the analyst community is just in love with this thing. Sometimes you have to move on."

The bottom line: Netflix stock deserves to stay in the penalty box until it quiets some of the concerns stemming from its first quarter earnings release.

Its decision to enter the vertical video game way late — and in a crowded space dominated by Instagram's Stories, Facebook's Reels, and TikTok, no less — is unlikely to rejuvenate the bull thesis on Netflix for now. But we look forward to finding these new vertical videos while searching for an '80s movie on a Friday night!

Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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Source: “AOL Money”