Back in my university days, I spent hours watching Netflix series, sometimes telling myself I’d stop after one more episode. Eventually, I decided to stick to movies because I was spending too much time in front of the screen.
But even then, finding something worth watching wasn’t always easy. Sometimes I’d spend more time scrolling through titles than actually watching anything.
That’s what came to mind when Jim Cramer discussed Netflix on Oct. 29, during the “Mad Money” Lightning Round.
He believes the stock “can’t lift,” and that the streaming giant has a problem investors shouldn’t ignore.
You used to be able to say, 'Hey, you seen that movie?' 'Yeah, I'm gonna go buy Netflix.' People don't do that anymore…. because they don't even know if it's on Netflix. Maybe it's on Amazon. Maybe it's on HBO. Maybe it's on Apple. I mean, who even knows? And that’s Netflix’s biggest problem.
Netflix’s “shared living room” is fragmented
Cramer’s argument is about behavior, not spreadsheets.
For years, Netflix was the default answer to “Where can I watch that?” It worked like a shared digital living room. If a show was the talk of the office, you already had the app.
Studios then pulled their libraries back to launch their own services. These days, hearing about a new movie doesn’t automatically make you open Netflix. You might have to check several streaming apps, consider another subscription, or even give up looking for it.
Also Read: Netflix is losing ground to YouTube
Add price increases, with the standard plan now at $19.99 a month and premium at $26.99, according to Netflix, and password-sharing crackdowns, and subscribers start judging value per hour watched.
I covered Netflix in September when it sat at a key support level near $71, and the main debate was YouTube. Cramer’s point sits next to that one. Digital i’s report I highlighted found YouTube’s average daily viewing overtook Netflix globally in 2025.
All of that reflected on the stock. Netflix (NFLX) trades at $62, down 33.82% year to date and 43.61% over the past year, according to Yahoo Finance. That is less than half of its all-time high of $134.12, set on June 30, 2025.
In another report by my colleague at TheStreet, Nielsen’s July Gauge put YouTube at a record 14.2% of all U.S. TV time, against 7.8% for Netflix, which ranked fourth. Nielsen figures cited in TheStreet‘s reporting show YouTube’s share has since climbed higher still.
More Netflix:
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- Down 46%, is Netflix a buy now?
What Netflix admitted on its own earnings call
The company did not argue with the engagement concern. On the Q3 call on Oct. 20, CFO Spence Neumann said: “To be clear, we want to grow view hours faster. We’re not satisfied. We’re working on it.”
Co-CEO Greg Peters said the U.S. slate needs to go “from very good to great,” and acknowledged that the advertising business is behind its targets because new ad products rolled out later than planned.
Netflix also made its largest headcount reductions since 2022. Peters called the reaction to price changes the ultimate test of value, which depends on how much people watch.
Related: Why Netflix reportedly walked away from Xbox licensing deal
The financials were not weak. Revenue grew roughly 12% to $12.87 billion, according to Netflix’s Q3 shareholder letter, and operating margin hit a record 34.6%, helped by cost timing that management expects to reverse in Q4.
Free cash flow rose about 8%, even after another $5 billion in content spending. The problem was the outlook.
Growth is expected to slow to around 11% in Q4, and management would not commit to its 2027 double-digit sales growth target. Shares fell more than 5% after the report and kept sliding.
Two views of Netflix
Last week I wrote about Bill Ackman’s return to Netflix. He called it a “high-growth utility” and said it was hard to get anyone to cancel. He argued the stock trades around 18 times earnings, one of its lowest valuations ever.
Cramer is now on the same company from the opposite direction. Ackman sees a service people keep. Cramer sees a service people no longer think of first.
Both can be true at once, and I think that’s the real story. Churn is low. Management says it improved in the U.S. and internationally, better than expected. Customers who already have Netflix rarely leave.
The harder job is making the next customer choose Netflix over four other apps, and that is a growth problem rather than a retention problem.
I’ve noticed this in my own viewing habits. I haven’t necessarily lost interest in Netflix, but I no longer assume I’ll find something worth watching every time I open the app. Sometimes I spend so long looking for a movie that I end up watching nothing at all.
What could change the Netflix picture?
The bull case has real catalysts. The ad-supported tier launches in 15 more markets in 2027, starting in March 2027 across nine EMEA countries plus Colombia, Peru, and New Zealand, according to Netflix’s shareholder letter.
That is the kind of rollout that added members when the tier first launched elsewhere. India is already a bright spot: View hours there grew 24% year over year, and paid net additions hit a record.
Further U.S. price increases and better ad inventory fill are also possible, and at roughly 18 times earnings, the valuation no longer asks much of the story.
The trouble is that none of those fix the question Cramer asked. A cheaper ad tier lowers the barrier to signing up. It does not tell a viewer where the movie their friend mentioned is hiding.
Netflix needs a hit big enough that people say its name again, the way they once said “Squid Game.” Management says it is adjusting the team to make that happen.
Until then, Cramer’s message is that a stock needs a story people repeat to each other, and for now, Netflix’s loudest story is that it can’t lift.
The next test is Q4 results on Jan. 20, 2026, when Netflix has to show that view hours are growing and that the ad ramp is back on schedule.
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