Ted Sarandos Addresses Slowed Growth and Strategic Focus at Netflix

Netflix co-CEO Ted Sarandos opened up about the company's recent growth struggles during Bloomberg’s 2026 Screentime event, revealing that engagement only increased by 2 percent in the first half of the year. He emphasized the urgency for Netflix to improve its growth trajectory, stating, "Overall, we’re not growing as fast as I want us to, and we’re working on making that move faster."

Strategic Shift to Live Programming

One of the strategies Sarandos highlighted for revitalizing engagement is the streaming giant's recent venture into live programming, which includes broadcasting select NFL games. Despite Netflix allocating around 5 percent of its $20 billion annual content budget to live events, it currently only constitutes approximately 1 percent of total viewership, resulting in a modest return on investment for the company.

However, Sarandos noted that live programming serves an essential function by driving new subscriptions and reducing subscriber churn. He stated, "The business is great and growing fine," indicating optimism about the potential impact of live content.

Competitive Landscape and Growth Concerns

Amidst these growth challenges, Sarandos addressed concerns surrounding the competitive landscape, particularly in light of the new Paramount Global and Warner Bros. Discovery merger worth $111 billion. When questioned about Netflix’s past failed attempt to acquire Warner Bros., Sarandos remained confident, asserting that their initial bid reflected solid business strategy. "I think the plan was solid... Any more than that, I thought we’d be taking it into negative territory—even with our scale," he said.

Assessing Market Dynamics

As the landscape shifts, Sarandos acknowledged uncertainty regarding how the merger will shape the streaming market. He remarked, "It looks on paper—so far it’s one and one. So I don’t know if one and one is two, or one and one is one and a half, or one and one is three." This reflects a cautious outlook on how combined forces in the industry will impact Netflix's market share.

Maintaining Focus on Professional Content

Though Netflix is engaging with YouTube talent, Sarandos was clear in delineating the company's strategy: "We’re definitely... not in the UGC [user-generated content] business. We’re in the professionally produced content business." He explained that while they are open to partnering with creators who produce quality content, the core focus remains on professionally developed material.

Despite exploring more collaborations with creators akin to those on YouTube, Sarandos confirmed that Netflix has no plans to introduce a free, ad-supported tier in its offerings. He indicated that adopting a completely advertiser-based model would undermine the value of the core product.

As Netflix continues to navigate these evolving challenges in the streaming landscape, Sarandos's remarks highlight an ongoing commitment to refining their content strategy while maintaining a focus on quality programming over quantity.

For more insights on Netflix's evolving strategy, see Sarandos Defends Netflix's Second-Season Performance, Keeps Podcast Data Private and Netflix to Raise Content Spend 10% in 2026 as AI Cuts Costs.

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