Netflix co-CEO Ted Sarandos acknowledged slowing engagement growth for his streaming service on Wednesday: Netflix’s audience grew just 2% during the first half of 2026.
“Overall, our growth is not as fast as I would like, and we are working to accelerate that evolution,” Sarandos told Bloombergof the Screentime 2026 event.
A potential starting point for engagement is the service’s recent shift to live programming, including a few high-profile NFL games. Netflix spends about 5% of its $20 billion annual content investment on live programming, Sarandos said, which in turn drives about 1% of the audience, not a mind-blowing return on investment.
However, what live is particularly good at is generating “a lot of registrations,” Sarandos said. This also helps reduce subscriber churn. Plus, advertisers really love it.
“The company is great and growing well,” Sarandos said, putting his previous statement in order.
But is its growth enough to meet a new threat to the market, the looming $111 billion combination of Paramount Skydance and Warner Bros.? Discovery? When asked if he regretted Netflix’s (very temporary) winning bid for Warner Bros. — not the Discovery article — Sarandos responded, “Nahhh,” basically.
“I think the plan was sound,” he (actually) said. “We won the deal at one point, so we think we priced it right, at our scale. It was the highest price at which I thought we could return value to our shareholders with this asset. Beyond that, I thought we would take it into negative territory, even with our scale.”
Netflix had a deal in place before David Ellison, who recently merged Paramount Global and Skydance, stepped in with a huge check backed by his billionaire father, Oracle founder Larry Ellison. The Paramount-WBD deal finally received the green light from a judge earlier today.
Sarandos says it remains to be seen how big of a threat the mega-merger will create. Maybe math isn’t math after all.
“It looks like it on paper – right now it’s one and one,” he said, talking about streaming market share. “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.”
There was a time when Netflix was racing to become Warner Bros. HBO before HBO became Netflix, as Sarandos said in 2012 as the streaming company’s chief content officer. Today, it appears Netflix has YouTube in its crosshairs in a similar way — but Netflix’s recent deals with YouTube creators don’t define a significant shift in strategy, Sarandos said.
“We’re definitely… not in the UGC (user-generated content) business,” he said. BloombergIt’s Lucas Shaw. “We’re in the business of professionally produced content. Now, I think there are a number of people on the platforms who are already doing enough professional programming, and if we can monetize that programming better for them, then we can do a deal with them. But we’re certainly not trying to appeal to the entire creator population.”
Netflix can offer better monetization in part because it has multiple revenue streams that it can split, whereas YouTube is almost entirely funded by advertisers.
Despite increasingly playing into YouTube’s creator pool, Sarandos said Netflix won’t offer a free tier — an entirely ad-supported model — anytime soon. No version of FAST (ad-supported free TV) would be worth “cannibalizing the core product,” he explained.
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