Does regular show business still work? Barron’s writer Jack Hough asked that question on the Barron’s Streetwise podcast episode “Does Show Business Work?” released October 23, 2026. He opened with the viral, user-generated “comments videos” spreading online, then offered an example from his own home: his preteen son “overwhelmingly prefers YouTube videos.”
His bottom line: “I’d rather be Netflix than anyone else in entertainment unless that someone is Apple or Amazon or Alphabet.” That puts Netflix (NASDAQ:NFLX | NFLX Price Prediction) ahead of legacy Hollywood. It also acknowledges that Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) play by different rules.
A Painful Year for Netflix Shares
Jack Hough noted that “Netflix stock was recently down 29% for the year.” The big tech trio has done better.
| Stock (Oct. 23 close) | Year to Date | One Year |
|---|---|---|
| Netflix ($65.85) | -29.77% | -40.87% |
| Apple | +28.26% | +34.45% |
| Amazon | +7.44% | +12.17% |
| Alphabet | +2.5% | +26.86% |
Netflix’s third-quarter report did little to change the mood. Revenue of $12.87B came in just short of the $12.88B consensus, while EPS of $0.87 beat the $0.82 estimate. Management trimmed its 2026 advertising outlook to roughly $2.7B from about $3.0B, mentioning a slower ad product rollout.
Profit Margins Legacy Hollywood Can’t Match
Jack Hough said “Netflix’s 31% operating margin is more than 10 points higher than Disney’s. That’s even counting those lucrative theme parks.” He added that “Netflix’s profitability recalls the golden age of cable television.” Disney (NYSE:DIS) and other legacy operators, by his account, are trading cable subscribers for streaming ones at “single-digit margins.”
Operating margin measures how much of each sales dollar is left after paying for content, staff and marketing. Netflix’s third-quarter margin expanded to 34.6% from 28.2%, and the company guides to 31.5% for the full year.
One Platform, One Budget
By Jack Hough’s count, Netflix’s $17 billion to $18 billion content budget funds a single platform. Rivals spread similar or bigger amounts across several services, sports deals and theatrical releases.
That focus shows up in free cash flow, which is the cash left over after operating costs and capital spending. Hough mentioning Wall Street estimates of more than $12 billion this year, rising to $21 billion by the end of the decade. Netflix bought back 63.9M shares for $4.8B last quarter, its largest buyback quarter ever.
Big Tech Treats Entertainment as a Perk
Hough said big tech “does show business as a side perk for its bundled services subscribers.” According to Jack Hough, YouTube spends roughly $18 billion a year on revenue sharing. Under that model, creators get paid a cut after their videos earn ad money. YouTube never pays upfront for a show that flops, so its costs move in step with its revenue.
Jack Hough put Amazon’s content spending above $15 billion and pointed to its “growing appetite for sports.” On Amazon’s latest earnings call, management said Thursday Night Football and NBA ad inventory “all sold out.” Jack Hough added that “Apple has a total content budget of close to $10 billion, and it cleans up on awards.” Apple’s chief executive mentioning a record 89 Emmy nominations this year.
What Investors Should Weigh
Netflix trades at about 25 times earnings, compared with roughly 14 for Alphabet, 34 for Amazon and 45 for Apple. Each of those rivals has a growth engine outside entertainment. Google Cloud revenue rose 82% last quarter, and AWS grew 37%. That gives them room to spend on video without requiring it to pay off on its own.
Netflix gets almost all of its money from entertainment. Its next tests are the ad tier’s rollout to 15 new countries starting in March 2027 and whether margins hold up while it pays for live sports.
Best-Positioned, With One Big Caveat
Hough’s view is that Netflix is the strongest pure entertainment company, with profits legacy studios can’t touch. His concern is that its hardest competitors don’t need entertainment to make money, and that pressure is likely to stay.