Morning Brief: The future of Netflix is now

Netflix’s quarterly report and shareholder letter mark a strategic shift that hit the stock — NFLX.OQ fell about 10% after missing guidance — but underscores a longer‑term pivot from pure streaming to diversified monetization. Management highlighted the ad‑supported tier as the largest source of new sign‑ups, expects roughly $3 billion in ad revenue in 2026 (about 2x 2025), and says it now works with over 4,000 advertisers (up 70% YoY). Co‑founder Reed Hastings won’t seek reelection to the board, and Netflix stressed stronger M&A discipline after a failed bid for Warner Bros., signaling it’s moving from insurgent growth tactics toward incumbent‑style monetization and dealmaking. The company’s changing peer set (AAPL, AMZN, GOOG removed/shifted vs. Magnificent Seven) and explicit focus on games, live events, podcasts and ad products give markets mixed signals: near‑term pain from the earnings miss, but potential upside from new revenue streams and scale advantages.