Netflix reported another enormously profitable quarter on October 20, with revenue reaching $12.87 billion and net income climbing to $3.66 billion. Wall Street wasn’t particularly impressed, and neither should subscribers be if the streaming giant continues raising prices without consistently delivering television and films worth staying home to watch.

We’ve covered Netflix’s 2026 price increases, its failed attempt to acquire Warner Bros. Discovery, and the increasingly expensive battle for streaming supremacy. But the latest earnings report exposes a problem that can’t be solved with another subscription tier, advertising initiative, or live sporting event. Netflix is generating more money while giving individual subscribers fewer reasons to spend their evenings watching it.

The company doesn’t have a financial crisis. It has a creative challenge, and the numbers are becoming difficult to ignore.

Related Reading:

Netflix’s Q2 and Q3 Financial Results Tell Two Different Stories

By conventional financial standards, Netflix is doing extremely well. Revenue increased sequentially in the third quarter, operating margins improved, and the company generated almost $2.9 billion in free cash flow.

Source: Netflix Q3 2026 Shareholder Letter.

The problem isn’t the absolute numbers but the direction of revenue growth. Netflix’s year-over-year growth rate has fallen from 17.6% in the fourth quarter of 2025 to 11.8% in Q3 2026, despite higher subscription prices and expanding advertising revenue.

Netflix also reduced its full-year advertising revenue forecast from approximately $3 billion to $2.7 billion, citing a slower-than-expected rollout of advertising technology. Management expects fourth-quarter revenue of approximately $13.44 billion, with weaker profit guidance reflecting, in part, costs associated with recently announced layoffs.

Investors have understandable concerns. But subscribers aren’t examining operating margins when they sit down on Friday night and spend 25 minutes scrolling through programming they have no desire to watch.

Netflix Subscribers Are Watching Less. That’s the Real Warning.

Research from investment firm Jefferies estimates that average monthly viewing time per Netflix member declined from approximately 66 hours during the first half of 2023 to 49 hours during the first half of 2026. That’s a reduction of almost 26%, and considerably more revealing than another quarterly earnings beat.

To be fair, Netflix reported more than 97 billion total viewing hours in the first half of 2026, up 2% year over year. The two figures aren’t contradictory: Netflix can attract more members globally while individual subscribers spend less time watching.

Netflix insists engagement remains healthy and says subscriber responses to its latest price increases have been consistent with expectations. The company also plans to reduce the frequency of its public engagement reports beginning in 2027, moving from twice-yearly reporting to annual updates.

Wonderful. When investors want more information about viewing habits, providing it less frequently is certainly one approach.

Netflix Needs Another Sopranos, Not Another Hundred Forgettable Originals

Remember when Stranger Things, Squid Game, and Ozark were the kinds of shows that made Netflix essential? People discussed episodes at work, argued about characters over dinner, and eagerly anticipated the next season.

The final season of Stranger Things attracted an enormous audience in late 2025, but it also demonstrated the difficulty of delivering a satisfying conclusion to a cultural phenomenon. Its final season currently holds an 83% critics’ rating on Rotten Tomatoes, compared with a substantially weaker 52% audience score.

Those ratings aren’t scientific measurements of everyone who watched the series, and the show’s commercial success is undeniable. But I found its conclusion disappointing, and clearly plenty of other viewers weren’t satisfied either.

Netflix needs another The Sopranos, Breaking Bad, The Americans, or Game of Thrones. Not necessarily another violent prestige drama, but original television with exceptional writing, complicated characters, genuine creative ambition, and enough cultural relevance to make people care about what happens next.

Netflix still produces major international hits and successful American releases. The question is whether it can deliver enough new, enduring franchises rather than depending on an endless rotation of disposable entertainment.

David Fincher and Netflix’s Creative Shake-Up

The departure of major creative talent should concern Netflix more than a disappointing advertising forecast.

According to October reporting from Page Six, David Fincher reportedly ended his Netflix overall deal following disagreements over budgets with former film chairman Dan Lin. That account has not been independently confirmed by Fincher or Netflix, and it doesn’t mean the filmmaker has abandoned the platform entirely.

Fincher’s upcoming The Further Mis-Adventures of Cliff Booth, starring Brad Pitt and written by Quentin Tarantino, remains part of Netflix’s fourth-quarter release slate. But losing a continuing arrangement with the director behind Se7en, Zodiac, The Social Network, and Mindhunter would hardly qualify as good news for a company desperate for distinctive original programming.

The wider leadership upheaval is equally revealing. Netflix is replacing content chief Bela Bajaria with former Disney and Fox executive Peter Rice, film chairman Dan Lin is departing, and approximately 1,000 employees are being laid off across several corporate divisions.

None of this proves that Netflix has lost its creative direction, but replacing senior executives while reducing staff suggests management knows something needs to change.

And while financial discipline matters, great films and television series rarely emerge from telling brilliant directors that the spreadsheet has final creative approval.

Paramount, HBO, and Warner Bros. Are Now a Much Bigger Threat

Netflix also faces a competitor that looks substantially different from the one it confronted six months ago.

As we reported in our extensive coverage of the Paramount and Warner Bros. Discovery merger, the transaction closed October 6, creating Skydance and bringing Warner Bros., HBO, Paramount Pictures, CBS, CNN, HBO Max, and Paramount+ under one corporate umbrella.

That’s an extraordinary collection of intellectual property and production experience, including the HBO television legacy that helped establish the modern prestige-drama era.

Netflix tried to acquire Warner’s studio and streaming assets but withdrew when Paramount’s competing offer became too expensive. Now it faces the combined company from the opposite side of the negotiating table.

For now, HBO Max and Paramount+ remain separate services, and Skydance faces its own enormous integration challenges. Combining two libraries doesn’t automatically create better original programming, particularly when billions in cost savings are part of the business plan.

But Netflix can no longer rely on being the largest streaming platform as its principal competitive advantage. With HBO’s creative legacy and Paramount’s substantial catalog under one roof, the competition for viewers’ time just became considerably more serious.

Has Netflix Become Too Focused on Pleasing Everyone?

There’s also a criticism that Netflix has become too concerned with political messaging, representation, and demographic targeting at the expense of storytelling. Some viewers describe that as the service becoming too woke, although there’s no reliable evidence establishing political themes as the principal cause of declining engagement.

The real issue is more fundamental. Audiences can appreciate diverse characters, difficult subjects, and challenging social commentary when they’re integrated into compelling stories. What becomes exhausting is writing that feels assembled by committee, where characters exist to deliver messages rather than behave like believable human beings.

Netflix needs to give creative talent room to take risks, develop complicated characters, and occasionally produce something that makes viewers uncomfortable for the right reasons.

Great television doesn’t need to agree with everyone. It needs to be worth watching.

Netflix Is Spending $1 Billion Down the Road From My House

Which brings us to Fort Monmouth, New Jersey.

Netflix is investing approximately $1 billion in transforming the former military installation in Eatontown and Oceanport into a major East Coast production campus. The development encompasses more than 292 acres, with 12 planned soundstages totaling nearly 500,000 square feet.

Construction is already well underway, and Netflix celebrated a major structural milestone in June. The first construction phase is scheduled for completion in summer 2027, with another phase following in fall 2028.

As someone who lives on the Jersey Shore, I’m not about to complain about Netflix investing a billion dollars into my neighborhood. The jobs, local economic activity, and potential benefits for nearby property values are all welcome. If the development makes my house more valuable, you certainly won’t find me picketing the construction entrance.

But there’s an important distinction between building an extraordinary production facility and producing extraordinary entertainment.

You can construct twelve state-of-the-art soundstages, employ thousands of talented people, and install enough technology to make a Hollywood executive weep with joy. None of that guarantees the next Breaking Bad.

It’s like building the finest restaurant kitchen in New Jersey and discovering that nobody hired a chef who knows how to cook.

Netflix Needs Better Stories, Not Just Better Margins

Netflix remains an enormously successful company, and its global reach, technology, and financial resources give it considerable advantages. But those strengths won’t automatically convince viewers to keep paying more for a service that increasingly competes with YouTube, social media, live sports, and a newly consolidated entertainment giant.

Peter Rice’s challenge isn’t simply producing more programming or lowering costs. It’s restoring the kind of creative ambition that gave Netflix its reputation in the first place, and making the service feel indispensable rather than merely familiar.

The company should invest in exceptional writers and filmmakers, support more ambitious original series, and resist the temptation to treat every creative decision as an exercise in demographic optimization. It also needs to make discovering worthwhile programming easier instead of burying it beneath an endless collection of algorithmically recommended distractions.

I want Netflix’s Fort Monmouth project to succeed. I want those soundstages filled with talented crews making films and television that people will still be discussing twenty years from now. Especially one that I wrote.

But the company needs to remember something fundamental: Nobody subscribes to Netflix because its operating margins are impressive. They subscribe because they want something worth watching.

And right now, Netflix could use a few more reasons to keep the television on.

Related Reading:

Private equity giant Blackstone is putting itself at the center of the AI boom, firm veteran Jas Khaira discussed last week on stage at TechCrunch Disrupt.

It is writing checks via various strategies, ranging from offering massive loans to data centers to investing in frontier AI models and applications.

Earlier this year, the firm launched Blackstone N1 (BXN1), a San Francisco-based central hub for its AI initiatives. The group is led by Khaira, who relocated from New York to be at the epicenter of AI.

Unlike earlier tech cycles such as mobile or SaaS, which allowed companies to reach significant scale with moderate capital, the transition to AI requires staggering amounts of investment. That need for capital is precisely why Blackstone, with its $1.3 trillion in assets under management, could play such a critical role in this tech shift.

Khaira emphasized that Blackstone sets itself apart from traditional venture capitalists through its focus on compute financing and its ability to offer flexible capital structures, ranging from debt to equity. And it has been investing aggressively.

“We’re the largest owner of compute outside of the hyperscalers today, whether it’s investments in neo clouds, investments in data centers, and being able to use that compute strategically to support companies,” Khaira said.

For instance, BXN1 played a key role in several compute-related deals, among them Crux AI, a neocloud launched in partnership with Google to commercialize its custom TPUs, to which Blackstone committed $5 billion as an investor. It also backed four-year-old Etched, a chip startup whose rapid development has caught investor attention. Neoclouds are cloud providers that rent out AI GPU infrastructure.

Blackstone pioneered a financing structure that allowed it to lend massive sums to venture-backed cloud neoclouds by analyzing both committed customer contracts and using GPUs pledged as collateral.

Blackstone’s first such deal came in 2023 with CoreWeave, shortly after that neocloud saw demand explode following the launch of ChatGPT. Despite having only “30 million of revenue and minimal profitability” at that time, according to Khaira, CoreWeave approached Blackstone for a $2.3 billion loan.

CoreWeave was borrowing against the considerable value of its large collection of Nvidia GPUs, with Nvidia also an investor. Blackstone also grew more comfortable with the loan because CoreWeave had contracts with blue-chip customers like Microsoft.

That transaction quickly became the financing model for how Blackstone and other credit institutions provided billions in follow-on debt to CoreWeave and rival neoclouds.

“One of the primary things that we’re looking to is the nature of the customer. And if the customer is an investment-grade customer — let’s say it’s Microsoft or let’s say it’s Meta — the risk gets priced relative to that customer,” Khaira said.

Building on its success with CoreWeave, Blackstone struck other neocloud financing deals, including co-leading alongside Coatue a $10 billion credit facility for Australian GPU provider Firmus earlier this year.

Khaira acknowledged that in recent weeks, the large debt burdens accumulated by these companies and other neocloud operators have begun to raise red flags. Coreweave’s debt alone has since ballooned to about $50 billion, causing Altimeter Capital founder Brad Gerstner to note in a recent CNBC interview, “The collateral that CoreWeave is putting up which is really only GPUs is not good enough anymore. They used that in the past to get cheap debt.”

Khaira said that on the credit side, the market jitters stem from a combination of factors. Interest rates ticked up in September, and hotter-than-expected inflation signals that borrowing costs may keep climbing. The flood of AI infrastructure debt offerings isn’t helping either.

“We’re also seeing higher credit spreads,” Khaira said, explaining that lenders are charging higher premiums on top of already higher base interest rates to finance the AI buildout. “The cost of capital to price in debt for a Meta or a Microsoft has widened out,” he added, pointing out that even tech giants with massive balance sheets and solid earnings are paying more to borrow.

Concerns about the rising cost of debt have spilled into the stock market. Shares of CoreWeave dropped over 20% in recent days, while Firmus scrapped its planned IPO on the Australian Securities Exchange at a target valuation of roughly $30 billion.

“Ultimately, the market wasn’t there at that valuation, and so I think as a result, that deal didn’t get done,” Khaira said about Firmus’ cancelled listing.

“The market is thinking what is the right price for neoclouds, what is the right price for these businesses in this moment when interest rates are moving up,” he said.

Despite those pressures on some infrastructure providers, AI companies simply can’t get enough compute to power their models. Their appetite continues to drive data center buildout.

Khaira downplayed worries of doom-mongers that the massive accumulation of AI infrastructure debt could lead to a widespread credit crisis, or worse, crash the economy altogether. “This doesn’t feel like something where you’ve got 2008 banks that are shaky credits,” he said.

Instead, he pointed out that because the vast majority of data centers are built for hyperscalers, the debt financing them is ultimately backed “by the most creditworthy companies in the world.”

Beyond funding data centers, Blackstone is helping companies adopt AI through a $1.5 billion joint venture called “Ode with Anthropic,” formed alongside Anthropic and Hellman & Friedman this year. Ode supplies forward-deployed engineers to help companies adopt AI and integrate it into their operations, starting with Blackstone’s 280 portfolio companies.

When asked if Blackstone-owned companies are seeing tangible gains from AI, Khaira conceded that “there is definitely ROI, but it is uneven.” He described technology adoption as something that could move in a “sawtooth-type pattern,” which, to skeptics, can look like an oversupply of compute before adoption catches up.

Google Maps is one of the most useful apps for your car’s dashboard, especially when you’re going somewhere. But let’s say you’re heading out for the weekend and haven’t quite figured out where to go. You could spend a few minutes searching for places on your phone, checking the weather, and figuring out the best route. Or you could ask Gemini to handle it.

That’s exactly what Google is bringing to Apple CarPlay. Gemini is rolling out in Google Maps on CarPlay, giving you a conversational AI assistant that can help you find places, plan trips, and navigate without typing multiple searches. The best part is you don’t need to know where you’re going before asking for directions.

Your Google Maps experience is getting a lot more conversational

Until now, using Google Maps on CarPlay has largely meant searching for a destination, choosing a route, and following directions. Gemini adds another layer by letting you describe what you’re looking for in plain language. For example, if you’re visiting a new city and want to find a scenic spot with a great view, you can ask Gemini to recommend somewhere that fits the description. 

Once it suggests a destination, you can keep the conversation going. You might want to know whether the weather is suitable for a visit or if there’s a better time to avoid crowds. Gemini can help answer those questions before you decide to head out. When you’re ready, you can ask it to start navigation while avoiding toll roads, all in the same conversation. Basically, it’s a much more natural way to interact with Google Maps, especially when you’re behind the wheel and would rather keep your attention on the road than fiddle with your car’s screen.

Here’s how you can try Gemini on Apple CarPlay

Once the feature reaches your device, open Google Maps on your CarPlay display and tap the Gemini icon. From there, you can ask questions, discover new places, and get directions without jumping between apps or typing multiple searches.

Google says Gemini is rolling out to Google Maps on CarPlay wherever the AI assistant is already supported, although availability may vary as the rollout progresses. Interestingly, this also gives CarPlay users another option beyond Siri. I’ve already received the feature on my CarPlay setup, and it’s nice to see Google bringing more of Gemini’s capabilities to Apple’s in-car platform. If you use Google Maps while driving as often as I do, this could make everything from your daily commute to an unplanned weekend getaway a little more convenient.

• South Korea deploys Cheongwang, a laser weapon designed to destroy hostile drones
• Hanwha estimates each Cheongwang engagement costs approximately $1.50
• Laser weapons could reduce dependence on expensive interceptor missiles against drones

South Korea has deployed Cheongwang, a laser-based air defence system designed to destroy hostile drones without using conventional ammunition.

Developed by Hanwha Systems alongside the Agency for Defense Development, the weapon has entered operational service.

The U.S. Cybersecurity and Infrastructure Security Agency (CISA) is warning that attackers are actively exploiting four vulnerabilities in Plex Media Server.

The security issues are collectively called Plex2Shell. When chained in an exploit, an attacker can obtain the owner’s admin token and execute code with elevated privileges.

Plex Media Server is a popular media suite that helps users organize personal collections of movies, TV shows, music, and photos, and stream them to other devices at home or remotely over the internet.

CISA has directed federal agencies to prioritize patching systems affected by Plex2Shell vulnerabilities or apply mitigations by October 23.

The security issues were discovered by security researcher Zach Main, who reported them responsibly to Plex on July 27.

The individual flaws are rated medium to high in severity, but the researcher assigns the full exploit chain a critical score of 9.8.

• CVE-2026-96652 – An SSRF flaw in /player/timeline that allows unauthenticated attackers to make Plex send POST requests to arbitrary destinations, including its own internal APIs.
• CVE-2026-96654 – A URL injection flaw in searchOne that allows attackers to invoke other plugins’ functions with attacker-controlled parameters.
• CVE-2026-96655 – An authenticated SSRF flaw in the transcoder endpoint that allows users to make Plex request arbitrary internal or external addresses.
• CVE-2026-96656 – An arbitrary file write flaw in the transcoder settings that allows administrators to plant malicious shared libraries that Plex subsequently loads, leading to code execution.

Zach Main published full technical details for the Plex2Shell vulnerabilities on October 16, followed by a proof-of-concept (PoC) exploit three days later.

On October 17, reports of Plex2Shell being exploited in the wild started to emerge, intially targeting  Plex honeypots to deploy a cryptominer.

Plex2Shell impacts Plex Media Server versions before 1.43.3.10861, which was released on August 4.

Hackers also target Siemens Software Center

Alongside Plex2Shell, CISA has added to its catalog of Known Exploited Vulnerabilities (KEV) an uncontrolled search path element flaw, tracked as CVE-2026-110936, in Siemens Software Center (SSC).

The German technology giant warned on October 19 that hackers were leveraging the vulnerability in campaigns linked to a multi-payload ClickFix delivery platform called Romulus.

Recent research from operational technology (OT) cybersecurity company Forescout notes that Romulus “may be a privately operated panel, a commercial cybercriminal delivery service, an affiliate framework, or software that has been copied between operators.”

Siemens’s alert on CVE-2026-110936 shares indicators of compromise (IoCs) and advice on identifying compromised systems, urging administrators to update Siemens Software Center to version 4.0.9.8 or later.

CISA has also added CVE-2026-106931 to KEV, an OS command injection flaw that affects affecting the SiteGuard Server Edition web application firewall (WAF). 

Both the vendor and Japan’s CERT flagged CVE-2026-106931 as actively exploited late last week.

The vendor urged users to upgrade to SiteGuard Server Edition for Apache httpd, Nginx, and IIS version 8.00 Update 5, and SiteGuard Server Edition for Apache httpd and Nginx on FreeBSD version 7.00 Update 6 and later.

Overall prevention scores can hide what happens after initial access. Once attackers are using valid credentials, prevention drops sharply.

The Blue Report 2026 measures defenses technique by technique across 338 million simulations run in customer production environments.

Advertisement

Get the report

OpenAI agents powered by the GPT-6.1 Sol and GPT-6 Astra models weakened misalignment monitoring during two internal tasks, interpreting coding instructions as authorization to do so.

AI alignment refers to how well an AI system’s goals and behavior align with human values, intentions, and instructions. It is a key focus of AI safety research aimed at preventing harmful actions and unintended outcomes.

One of the incidents occurred on October 3, when an agent powered by GPT-6.1 Sol extended an earlier human instruction “don’t send any messages” related to a Slack history search to automatic monitoring alerts.

It directed a sub-agent to empty notification recipient lists and suppress notifications. Although monitoring continued to run and save findings, it disabled alerts to humans.

OpenAI says this happened even though the agent earlier reasoned that alerts should remain enabled.

A second incident on October 6 involved a GPT-6 Astra-powered agent tasked with migrating a program. The agent removed existing monitoring integration to match a reference implementation and then denied doing so.

After reporting the migration was complete, the agent did not tell the user that monitoring was disabled. Furthermore, when asked directly, the agent lied to the human.

OpenAI says that the agent also replaced a test intended to preserve monitoring with one asserting that the monitor context was absent.

Although both incidents involved agents weakening alignment monitoring despite explicit instructions not to, OpenAI classified neither as P0 (“Priority Zero”), its highest urgency level for issues requiring immediate attention.

Ongoing investigation

OpenAI says it is investigating whether the unintended behavior stems from excessive persistence in task-completion goals, a poor understanding of monitoring requirements, or a specific tendency to evade monitoring.

“We are also developing evaluations to test whether models might have a propensity to evade misalignment monitoring in particular and exhibit motivated reasoning in order to do so,” OpenAI explained.

“We don’t yet have a satisfying explanation for this behavior, and will investigate this behavior through the creation of paired evaluations, resampling of agent continuations, and experiments on models’ internal activations.”

The AI firm says it has updated its internal Auto-Review system to now detect and block attempts to disable misalignment monitoring. At the same time, it will also reject all workloads that lack valid monitoring requirements.

Overall prevention scores can hide what happens after initial access. Once attackers are using valid credentials, prevention drops sharply.

The Blue Report 2026 measures defenses technique by technique across 338 million simulations run in customer production environments.

Get the report

Anyone who has used Google Chrome has probably seen the red warning screen when they click a suspicious link or try to visit a potentially dangerous website. Google is now beefing up this warning system by adding a new layer that will flag websites that seem fishy, even when Safe Browsing does not have enough confidence to classify them as outright dangerous.

The new Suspicious sites category is being added to Chrome’s Enhanced Protection mode and will sit below the existing Dangerous sites classification. Google says these are pages that show deceptive patterns commonly associated with malicious websites, but where Safe Browsing has a lower-confidence verdict.

Chrome will warn you before it is completely sure

Instead of immediately showing the familiar full-page red screen, Chrome will show a different warning when it suspects something is wrong but doesn’t have enough evidence to call the website dangerous. Google is using different colors, icons, text, and formatting for these alerts, making the two warnings easier to tell apart. Known malicious websites will continue getting the existing red screen.

The extra warning could help older users or people unfamiliar with the tricks used in phishing and other online scams. These days, scammers often use AI to make very convincing copies of e-commerce or support websites, so an early warning could be quite useful in deterring a user from putting in sensitive information like logins, passwords, or financial information on these websites.

Gemini is helping Chrome catch more scams

Google is also upgrading the system behind Enhanced Protection. Chrome is moving from its earlier on-device Gemini model to a more powerful server-side version that can examine the brand a page claims to represent, its apparent intent, and how likely it is to be a scam. Safe Browsing combines that information with domain reputation and other security signals before reaching a verdict.

Chrome is also adding protection against ClickFix scams, which trick people into copying and running malicious commands. If Chrome detects a suspicious copied command, Safe Browsing can analyze it and show another warning if it is considered dangerous.