In its shareholder letter for the second quarter of 2026, Netflix said its advertising business is set to roughly double this year to about $3 billion, and for the first time described separately how people watch video podcasts. Wedbush Securities analyst Alicia Reese already said in January 2026 that “We expect ad revenue to become Netflix's primary revenue driver in 2026, with significant opportunities in 2027.” The company that defined streaming over the last fifteen years is widening what it earns from.
What Netflix reported for the second quarter
Revenue in the second quarter of 2026 reached about $12.56 billion, up 13% year on year. The operating margin was 33.4%, compared with 34.1% in the second quarter of 2025. For the full year 2026 Netflix expects revenue between $51.0 billion and $51.4 billion and an operating margin of around 31.5%. The subscriber count exceeded 325 million.
The scale of this position was described by media analyst Doug Shapiro in the introduction to his book Infinite Content, published in May 2025. Netflix's market value, he said at the time, had exceeded $400 billion, “more than Disney, Comcast, WarnerBros. Discovery, Fox and Paramount combined”. Shapiro previously led strategy for the Turner division at Time Warner and before that ran investor relations there.
Advertising, live events and video podcasts
Netflix built its own advertising system, Netflix Ads Suite, and by November 2025 rolled it out in all twelve countries with an ad-supported tier. The company says ads reach more than 190 million monthly active viewers. Netflix tested interactive video ads in the US and Canada and planned their global roll-out for the second quarter of 2026. For live programming it began inserting dynamic ads into WWE matches and the NFL Christmas programming. Advertising revenue for 2025 exceeded $1.5 billion, which according to The Current is 2.5 times the 2024 figure.
Video podcasts belong to the same logic. In its half-year viewership report for 2026, Netflix placed them in the “Other Shows” category, which together gathered 757 million hours viewed. In its shareholder letter it added that “our recently launched video podcasts over-index on viewing during the day and on mobile devices, an indicator that this engagement is incremental”. Partners include Spotify, with The Ringer, iHeartMedia and Barstool Sports, and original shows include The Pete Davidson Show.
Creators take time from professional video
Shapiro frames the last decade as a disruption of distribution, which Netflix itself kicked off, and the coming decade as a disruption of content creation itself, driven by creators and generative AI. He described the contrast in volume in one sentence. “Creators reportedly upload about 300 million hours of video to YouTube annually, compared to my estimate of about 15,000 hours of new TV series and movies from Hollywood, 20,000 times as much.”
Viewing data confirms the shift. According to Nielsen's The Gauge, YouTube took 13.8% of TV-screen time in the US in May 2026, making it the largest single distributor for the third month in a row. Streamed viewing combined reached 48.6% of all TV time.
Netflix is also responding by going directly to creators. According to Bloomberg, as cited by Fortune in August 2026, Netflix is negotiating with dozens of YouTubers and paying creators such as Nick DiGiovanni to publish simultaneously on YouTube and Netflix. YouTube, for its part, is offering popular channels millions of dollars to publish their content only on its platform for a period of time.
Both American platforms lead the European market
According to the European TV Streaming Outlook 2026 from the DPP organisation, published in April 2026, YouTube and Netflix take the top spots in most European markets, while the strongest domestic service in Poland, Germany, France, Spain, Italy and Britain ranks no higher than fifth. Finland is the exception, where the public broadcaster's streaming service Yle Areena ranks second, behind only YouTube and ahead of Netflix. In Spain, according to the same outlook, “around four in every five minutes watching online video” go to American services.
Netflix is thus widening its streaming revenue with advertising and video podcasts, while YouTube holds the largest share of time on American screens.
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