On Tuesday, Social Capital founder Chamath Palihapitiya questioned Netflix Inc.’s (NASDAQ) content strategy and debt burden after the streaming giant reported third-quarter results that narrowly missed revenue estimates.

Chamath Palihapitiya Questions Netflix’s Content Strategy

In a post on X, Palihapitiya said he watches YouTube every day but rarely uses Netflix, describing the streaming service as a "dormant subscription."

He argued that YouTube benefits from lower content creation costs, while Netflix has accumulated significant debt to finance its content library.

"YouTube has very low costs of content creation. Netflix has $14B of debt that has financed [its] content library," Palihapitiya wrote.

"Another lesson in the halls of mismatching assets and liabilities? Time will tell," he added.

This tracks. I watch something on YouTube every day. Netflix is a dormant subscription for me.

YouTube has very low costs of content creation. Netflix has $14B of debt that has financed their content library.

Another lesson in the halls of mismatching assets and liabilities?… pic.twitter.com/b0KMkkVeuI

— Chamath Palihapitiya (@chamath) October 20, 2026

YouTube is a video-sharing and social media platform owned by Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google.

YouTube Commands Larger Share of TV Viewing

According to Nielsen’s The Gauge, as of July 2026, streaming accounted for 49% of U.S. television viewing, compared with 19.5% for broadcast TV and 18.7% for cable.

YouTube led individual streaming platforms with a 14.2% share of TV viewing, nearly double Netflix’s 7.8%. Walt Disney Co.’s (NYSE:DIS) Disney+ accounted for 4.7%, while Amazon.com, Inc.’s (NASDAQ:AMZN) Prime Video captured 4.2%.

Netflix Revenue Misses Estimates, Shares Slide

On Tuesday, Netflix reported third-quarter revenue of $12.874 billion, up 12% year over year but slightly below Wall Street’s estimate of $12.876 billion.

The company forecast fourth-quarter revenue of $13.442 billion and earnings of 67 cents per share, below analyst estimates of $13.517 billion and 73 cents, respectively.

Netflix now expects full-year revenue of $51.1 billion.

In its shareholder letter, Netflix reported $15.3 billion in gross debt and $8.2 billion in cash and equivalents at the end of the quarter.

The company said its debt increased by approximately $1 billion after issuing bonds to fund an upcoming $1 billion debt maturity.

Netflix reported gross debt of $14.4 billion and cash and cash equivalents of $9.1 billion at the end of the second quarter.

Price Action: Netflix closed Tuesday down 1.66% at $68.69. It fell 5.78% to $64.72 in after-hours trading, according to Benzinga Pro.

According to Benzinga Edge Stock Rankings, Netflix has a negative price trend across the short, medium and long term, while its Quality ranking is in the 88th percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo Courtesy: Kathy Hutchins On Shutterstock.com