Over the last 12 months, Netflix (NFLX 0.39%) shares have fallen 14%. While the stock is still higher than its May 2022 low point of $177 per share, the company faces a number of headwinds -- not least of which is increasing competition from subscription video on demand (SVOD) rivals. Nonetheless, investors interested in Netflix's stock may be wondering if now is a good time to buy -- particularly as some experts project that a bull market is on the horizon.

Let's break it down and determine if Netflix is buy-worthy today.

Netflix faces competition and churn 

Netflix has been a player in the streaming industry since 2007. At the time, Amazon was also in the space with its Unbox service (later rebranded Prime Video), but beyond that, there were few other big SVOD names.

Fast-forward to 2023, and Netflix and Amazon find themselves competing with Walt Disney, Warner Bros. Discovery, Paramount Global, and more. In an ever-crowded market, the challenge is not just attracting customers, it's also holding on to them.

A long-term belief in ad-supported streaming

Netflix lost customers over successive quarters last year, spurring it into action. One of the streamer's key strategies was an ad-supported tier. Before the launch, Netflix's internal projections reportedly estimated the service would attract 40 million customers by late 2023. However, when Basic with Ads -- priced at $6.99 per month -- landed in November 2022, the response was somewhat muted. Sourced reports quickly showed Netflix had returned money to advertisers because of lower-than-anticipated viewership numbers.

Netflix addressed the issue of its less-than-stellar entry into the ad-supported arena during its fiscal 2022 fourth-quarter earnings call, where the company noted it was still finding its feet. 

Greg Peters, Netflix's chief operating officer and chief product officer, said Basic with Ads was "delivering a solid experience," but conceded the company still had some way to go over "the next quarter or two."

CFO Spence Neumann was a little more succinct, citing Walt Disney-controlled Hulu as the benchmark for ad-supported streaming. "[W]e're not going to be larger than Hulu in year one," said the executive. "But, hopefully, over the next several years, we can be at least as large."

A move into cloud gaming

Another area Netflix is showing faith in is video games. In November 2021, the company rolled out dozens of iOS and Android titles, exclusively aimed at its subscribers. Similar to its experience with Basic with Ads, the initial adoption rate has been rather underwhelming; a report last summer showed Netflix's games had been downloaded by fewer than 1% of its subscribers.

Despite the weak showing, Netflix is all in on games. During Netflix's Q3 2022 investor call, co-CEO Ted Sarandos made clear the company's belief in the sector, saying "[w]e believe that the future of television, of films, and games is streaming."

More recently, Leanne Loombe, Netflix vice president and head of External Games, has said the company is actively building a cloud gaming service. Speaking with reporters, Loombe did not provide explicit details of the product Netflix is working on, but said the streamer wants to ensure its titles are "playable on every Netflix device" its customers have.

Betting on Netflix's bets

If Netflix's shareholders have seen anything over the last year, it's that the streamer is adaptable. Having lost subscribers, the company quickly spun up an ad-based service. And faced with a slew of SVOD competition, Netflix is making a serious push to become a gaming company as well. But, as already outlined, these endeavors are still at a nascent stage, and there's no certainty that either -- let alone both -- will pay off. After all, Alphabet's Google tried to make a name for itself in cloud gaming with Stadia, only to flame out entirely.

Despite the challenges ahead, Netflix is a company that has always been comfortable at breaking new ground; indeed, the company's decision to get into SVOD early is arguably a key reason it's now the biggest global streaming player by subscriber numbers. For some investors, that track record might be enough to bet on the company today. 

For others watching the market, Netflix is expected to reveal its Q1 2023 numbers on April 18, so expect the company to discuss its ad and gaming strategies. If it shows notable signs of progress in these areas, then it may be the right moment for some to back the company.