Sarandos Acknowledges Slower Growth
Netflix co-CEO Ted Sarandos admitted on Wednesday that the streaming service's growth in engagement has slowed, with viewership increasing just 2 percent during the first half of 2026. Speaking at Bloomberg's 2026 Screentime event, Sarandos said the company is not expanding as quickly as he would like and that efforts are underway to accelerate that pace. He also noted that the business overall is performing well and continues to grow.[S1]
One area Netflix is betting on to boost engagement is live programming, including several high-profile NFL games. Sarandos revealed that live content accounts for roughly 5 percent of Netflix's $20 billion annual content budget but generates only about 1 percent of total viewership. Despite the modest return on investment, he highlighted that live events drive a significant number of signups, help reduce subscriber churn, and are particularly popular with advertisers.[S1]
Merger Threat and Strategic Choices
When questioned about the pending $111 billion union of Paramount Skydance and Warner Bros. Discovery, Sarandos indicated it is still unclear how seriously the merged entity would challenge Netflix competitively. He wondered whether their combined streaming share would merely be additive, noting it might end up smaller or larger than the parts suggest. Turning to Netflix's short-lived winning bid for Warner Bros., he voiced no second thoughts, saying the approach was sound and the price suited Netflix's size, and that spending more would have harmed shareholder value.[S1]
The Paramount-WBD deal received judicial approval earlier on Wednesday. Netflix had reached an agreement for Warner Bros. before David Ellison, who recently merged Paramount Global and Skydance, intervened with a substantial offer backed by his father, Oracle founder Larry Ellison. Sarandos also clarified that Netflix's recent deals with YouTube creators do not signal a strategic shift into user-generated content. He emphasized that Netflix remains focused on professionally produced content and is not attempting to bring over the entire population of creators, though it may partner with those whose programming is close to professional. He ruled out launching a free, ad-supported tier or any FAST offering, saying it would cannibalize the core product.[S1]
