New Google AI TV tool could change how Netflix is found, watched | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Google is extending its Gemini AI reach beyond phones and computers to the living room. This may have a huge impact on streaming services like Netflix (NFLX) .

Google revealed this week that its conversational AI will work with Google TV and Android TV devices. This would put Gemini in front of more than 270 million people who use it daily.

It also raises a new question for investors: What will happen to Netflix if Alphabet (GOOGL) is the only company that can source content?

The largest company that may be affected is Netflix. The streaming giant had more than 301 million paying customers and almost $40 billion in sales by the end of 2024.

This happened following the Christmas quarter, when a record 19 million new consumers joined.

But the debut of Gemini might impact how consumers locate the next episode. Instead of going directly to Netflix, users may increasingly start asking Gemini for ideas.

This change could either make Netflix more tempting to customers, or drive them to Alphabet’s YouTube and other competitors.

Wall Street loves Netflix for its growth, pricing power, and worldwide reach, especially after a time of sluggish growth.

But Gemini’s presence on the largest screen in the house changes everything for investors to think about as the streaming market changes. Alphabet has a tremendous built-in user base.

Alphabet’s Gemini AI could soon influence how viewers discover Netflix shows and movies.

Image source&colon; Morris/Bloomberg via Getty Images

Netflix’s discovery moat meets Google’s new AI gatekeeper

For years, Netflix was the most popular streaming service, with a market value of $517.75 billion. Over 300 million people have chosen it as their first option due to its home screen, recommendation engine, and global brand.

Netflix’s biggest strength is that it controls discovery, which lets it immediately inform consumers about “what’s next.”

Adding Gemini AI to Google TV by Alphabet is a game changer. Millions of people could stop opening the Netflix app and searching through the programs and instead ask Gemini what to watch.

If Google chooses to concentrate on YouTube, YouTube TV, or select partners in its responses, Netflix may lose some of the attention it has been getting for a long time, possibly undercutting its core advantage in user engagement.

The stakes are high. Netflix had its best quarter ever in Q4 2024, gaining more than 19 million new members, and it is forecasting $45 billion in sales for FY 2025.

Wall Street trusts that it can set pricing, since its average revenue per user is around $11.64 per month. But if Gemini stands in the way between Netflix and users, it may be tougher for the company to sustain their attention and explain why its rates are so high.

Reach by the numbers: Netflix vs. Google’s Gemini

Netflix ended 2024 with 301.6 million paying customers, up roughly 16% year over year, after a record 19 million additions in the Christmas quarter.

This momentum helped boost yearly income to over $39-$40 billion, with an average revenue per user of $11.64 per month.

Alphabet’s Gemini deployment has its own significant scale. Right now, Google TV and Android TV power more than 270 million devices across the world, which is the same number as Netflix’s whole member base.

In fact, this implies that Gemini might someday show up on nearly as many screens as Netflix’s paying users.

For investors, the math is easy: If Gemini recommendations make Netflix viewing better by 5% across all devices, it may lead to millions more hours viewed and maybe millions more in subscription and advertising revenue.

But if Gemini instead sends even a small amount of that traffic to YouTube or YouTube TV, Netflix may have to deal with a lot more competition.

The size of those numbers shows why Wall Street is paying attention: Google’s AI is more than just a feature; it controls how hundreds of millions of people pick what to watch.

Netflix remains the one to watch

Netflix has grown despite rivals, with the stock growing by 152.3% over the last five years, but Alphabet’s Gemini poses a new challenge by influencing what viewers watch.

For investors, it’s a double-edged risk: Gemini could boost Netflix by driving more viewing, or hurt if Google prioritizes its own platforms.

With Netflix priced for high growth, as its P/E ratio of 51x shows, Wall Street will watch closely whether its lead in streaming discovery expands or erodes as AI reshapes viewing habits.